California legislators are busy moving along their latest job killing and unconstitutional Internet tax bills. The internet tax has proven to be ineffective in states that have passed this legislation as many have introduced repeal bills after experiencing the detrimental consequences.

SB 234, recently passed in the Senate and set for hearing before the Assembly, attempts to dissolve the physical nexus standard that prevents the state from forcing out-of-state companies to collect and remit taxes. Unlike the previously reported AB 153 and AB 155, which would force online retailers to terminate contracts with affiliates in California, the Senate bill is even more dangerous. SB 234 not only cedes authority to the Board of Equalization to figure out how to force online retailers to collect tax, but worse it is potentially not subject to the two thirds supermajority vote requirement. If this legislation passes, all authority regarding who is required to collect and remit taxes will be relinquished to the California Board of Equalization. This is a slippery slope that is enormously threatening to small businesses and job growth.

A similar bill in Louisiana, HB 641 has also recently been introduced. This legislation would require out-of-state retailers to collect and remit sales tax for purchases made on the Internet. As seen in states such as Rhode Island and North Carolina, this tax will do nothing to alleviate the state’s deficit and will only accomplish putting Louisiana companies out of business and increasing the tax burden on the already struggling consumer.

At a time when most states are experiencing the highest unemployment in history and mounting debt, raising taxes is not the answer. HB 641 will deter retailers from investing in the state and cause an even greater increase in job loss. The bill is not only likely unconstitutional, but bad policy.  California legislators are busy moving along their latest job killing and unconstitutional Internet tax bills. The internet tax has proven to be ineffective in states that have passed this legislation as many have introduced repeal bills after experiencing the detrimental consequences.