SACRAMENTO - After years of adamantly rejecting an Internet tax plan that he said would slow the growth of the dot-com economy, Gov. Gray Davis is now willing to consider a proposal that would force many online companies in California to charge state sales tax.
In a significant shift, a Davis spokeswoman said Wednesday the governor is willing to consider an Internet sales tax -- the first of its kind in the nation -- to help fill what he estimates is a $34.6 billion budget shortfall over 18 months.
Key lawmakers are pushing forward with a plan to require companies that do business online and have a retail outlet in California, such as Toys R Us and Barnes & Noble, to collect sales taxes. It also would apply to catalog sales.
``California's fiscal climate has changed; the dot-com economy has changed,'' Davis' spokeswoman Hilary McLean said. ``While he didn't favor it in the past, he is willing to review it in the bigger context.''
State Sen. Dede Alpert, a San Diego Democrat, has breathed new life into an earlier proposal that was endorsed by the Legislature but vetoed by Davis in 2000. The bill would require any company with a physical presence -- retail store or warehouse -- in California to charge sales tax on purchases made online by California customers. But it excludes businesses that do business only online or customers from another state.
more at http://www.bayarea.com/mld/mercurynews/news/5064223.htm
