Besides putting forth a new $4.9 billion package of tax hikes, Senate Democrats plan to pursue other tax changes, including a requirement that online retailers such as Amazon report its California sales to state tax authorities each month.

Democratic budget aides recommend that the Senate approve a more stringent version of Assembly Bill 2078, which requires online retailers to notify California customers that they owe use tax on their purchases.

The bill was watered down in Assembly committee, but Senate aides suggest that lawmakers pursue an earlier version that required online retailers to give the names, addresses and purchase details of transactions to California authorities each month. The Senate budget committee estimates the state could generate at least $100 million annually.

Californians are already required to file use tax on their Internet purchases, but few currently do and the state has trouble enforcing the law. The state collects about $10 million annually from residents who pay this tax on their income tax forms.

Gov. Arnold Schwarzenegger has opposed attempts to increase tax collection on internet purchases in the past. But Democrats say that collecting more taxes on online purchases would even the playing field for brick-and-mortar stores in California, which collect sales taxes at the point of purchase.

A Senate budget subcommittee is scheduled to review the Internet tax idea today. The same panel will consider recommendations to suspend the professional licenses of delinquent taxpayers, as well as require banks to share information on those individuals.

Posted by Kevin Yamamura

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