On The Money: Internet Police

Billion Dollar Plan Raises Privacy Concerns

By Mike Luery

SACRAMENTO (CBS13) — With California deep in debt, a controversial plan has emerged that calls for private vendors to monitor what you buy on the Internet.

The Board of Equalization (BOE) says it could raise a billion dollars a year in previously uncollected use taxes, but critics call it haunting to hire “Internet Police”.

One of those critics is Monique Bell, who started My Kid Sister Clothing Company, three years ago in Stockton.

“If you wear it, we sell it,” Bell told CBS 13 inside her Stockton home.

Bell is the owner of My Kid Sister Clothing Company, an Internet portal that allows her customers to find clothes for kids – and the whole family at a discount. She’s concerned by the BOE plan – a staff proposal to identify Internet buyers who use her site and others, to purchase things from out-of-state vendors.

“I think it’s like Big Brother. It’s definitely very chilling,” said Bell. The Internet entrepreneur told CBS 13, “I think our customers are just going to stop buying from us. We’re going to see a dramatic drop in sales.”

Under state law, if you buy something online from an out-of-state company with no physical presence here – since you are not paying sales tax, you are supposed to pay a use tax to the State of California, but many people never do.

That could change however, under the BOE proposal, which would authorize California to spend up to $10 million to hire private vendors to track down what you purchase over the Internet.

“This is just a fishing expedition as far as I’m concerned,” said George Runner, an elected member of the Board of Equalization.

Runner is fighting the Board’s staff proposal. CBS 13 asked him to explain how it was pitched to the Board:

“One of the ideas is well, we think there might be some people who will sell us data,” Runner warned about the proposal. “That will tell us what kind of credit card transactions or private transactions that a Californian may have made in purchasing something out of state,” he told CBS 13.

Under the plan, California could generate up to $1.1 billion in uncollected taxes by monitoring what you buy online. Anyone purchasing more than $5,000 a year would be fair game. But active Internet users like Dan and Amber Campbell of Sacramento worry about government watching over their shoulders.

“I just really think it’s an invasion of privacy and it should be back in the hands of the retailer, not the consumer,” Amber Campbell told CBS 13. Her husband Dan Campbell has similar concerns.

“It would kind of be more of a Big Brother type scenario,” Campbell told CBS 13 “And I really don’t feel like we need one more person watching what we do online or what we purchase.”

Keeping tabs on Internet purchases is so controversial the Board of Equalization has pulled the proposal from the calendar for now – and asked for further study.

“This item was pulled from the calendar for further review,” said BOE Spokesperson Anita Gore via e-mail. “It was not ready for discussion at the time it was pulled from the agenda and is not ready for discussion at this time.  There is no one available from BOE for an on-camera interview at this time,” she told CBS 13 in the statement.

California’s Use Tax law has been on the books since 1935.

Last year, the state took in more than $3 billion – but there’s still more than a billion dollars that go uncollected.

Send us your story ideas via e-mail to onthemoney@kovr.com. You can also follow On The Money stories in progress via Twitter at http://twitter.com/#!/mikeluery

More from On The Money
  • Lew Ninwosix

    First!!!!!!! Tat’s bull****. Most likely already getting “shafted” from online purchase then someone trying to tax me additional. No Way. Cut the saleries of all Politicians and reduce “waste” to gain higher revenue margin for the state

    • Armed Patriot

      Dont forget to cut the welfare for illegal aliens, those collecting welfare for over two years straight, and union pensions.

      • Bongo

        You’re right on the money!!! If these three things were applied California might become again a golden state.

  • http://internetblog.pl/2011/05/04/on-the-money-internet-police-%c2%ab-cbs-sacramento/ On The Money: Internet Police « CBS Sacramento | Internet blog

    […] post: On The Money: Internet Police « CBS Sacramento Bookmark to: This entry was posted in Uncategorized and tagged california, private-vendors. […]

  • Jake

    The audacity of these clowns making you pay (again) just for the privilage of using something you bought somewhere else. Double taxation, pure and simple, and just because some bureaucrat makes it a law doesn’t mean it’s legal.

  • Greg

    Take control of your life and do something, MOVE to another state! You realize there are more than one state right????

    • Derek

      Don’t move, vote these idiots out. Let them move.

    • Armed Patriot

      Kinda hard to move when we cant sell our houses.

    • Dean

      I moved out of Kommiefornica this year, specifically because I saw this “tax-em to death” mentality coming, due to Kommief’s impending bankruptcy.

  • B. J. Kuykendall

    This lunacy drove me out of CA some 18 years ago! Don’t they realize that at best, this policy will penalize all CA-based internet retailers (which will lose business because of the price disadvantage the tax will impose vs. non-CA-retailers)? Very likely, this will result in a LOSS of tax revenue, not a gain!

    Why should I, now a TX resident, buy from a CA retailer if it costs me 8-10% more than if I buy elsewhere?

    • Armed Patriot

      They are talking about taxing Californians for online purchase made from out of state retailers.

  • stork

    Why just tax online purchases , why not tax purchases made on vacation or when traveling ? When does it stop ?

    • Armed Patriot

      You are already required to pay taxes for items purchased when traveling. It is called the USE tax.

      • Eric

        Armed, stork is stating that why don’t the morons in california government just monitor everything one would buy when on vacation to another state and tax them again?

  • http://loupickney.wordpress.com/ Lou Pickney

    Perhaps California would be better advised to cut back on spending.

    • Eric

      Lou, you are 100% correct.

  • Fred

    The removal of tyranny is good, righteous, and just.

  • Bill Neumann

    One thing that is wonderful about living in California is that we can place a referendum on the ballot let say making it a felony to monitor the private transactions of individuals in the state. This becomes the law of the land and any official that crosses it gets 10 years extra hard labor. I’m ready to sign

    • Dave in California

      …and then an activist judge will declare your referendum unconstitutional, even if 90% of the voters in California agree with you.

      • Eric

        You’ve got that right! Awesome comment!

  • http://seo9oneone.com/internet-police-in-california/ Internet Police in California | SEO9oneone

    […] On The Money: Internet Police « CBS Sacramento. Please share: […]

  • Political Atheist

    Funny how CBS NY just did a story on the possibility of high tech security (read: TSA-like checks) at malls, sporting events etc. because of the fake “war on terror” will have “terrorists” seeking soft targets. That will kill brick and mortar. And now CBS CA has this story.

    The noose is tightening even more, people.

  • Jw

    Repeal the use tax! It’s un-American and unenforceable without making government bigger.

  • Mike00ss

    Californians, your state used to be the “trend setter” for the country…Now it’s just another ball & chain story of taxation and spending. I used to go to Cali a lot. I haven’t been there in at least 7 years. guess the shine just wore off the more I saw of the place.

    • Eric

      Blame the morons living here that continue to vote for the jackholes that run the place. Its the corrupt leading the blind.

  • Joe E in the IE

    If I knew an internet sales tax was funding the best public schools in the country, meticulously maintained infrastructure and generally keeping the Golden State golden instead of never paying off a half-century and more of irresponsible fiscal policies, I’d be proud to pay it.

    ‘Til then, hands off, you greedy overpaid b*st*rds.

  • American Sharecropper

    I moved from my beloved home state of California years ago. It breaks my heart to watch the leftists destroy it. Greed and love of power drives the left these days, the cheap excuse of “helping the needy” has empowered these immoral thieves to the point of spying on your every move while pretending to be morally superior to you.

    The left is creating the very police state they accuse the right of wanting. The irony would be funnier if the results where not so scary.

  • Mark Carlton

    I’m surprised the FTC doesn’t recognize these taxes as what they are: illegal interstate tariffs.

  • Susan Bennett

    California could save $4 billion a year if it stopped treating illegal aliens as lawful citizens

  • Union Yes!

    We need these tax dollars to provide the good union jobs we deserve! We can’t count on the private sector to provide the jobs and benefits unions provide.

    • Eric

      I think your comment is in jest, but regardless, the more they demand and the more they tax, the more people will move out of state. Then what? Where is all that revenue going to come from? The unions will sink right along with the whole state, and I would be so happy to see it happen. I love my state, but it is just a sorry shell of its former self. Thanks libs and my fellow citizens who continue to vote them into office! *sigh*

  • W.I.J.G.

    ‘Board of Equalization’ sounds like something right out of Atlas Shrugged. Sure to be a disaster for whoever it touches.

  • Tom Walter

    I’m So Glad I Moved Out Of That ‘FNG’ State. Born & Raised There, But Will Never Return.

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