On The Money: Internet Police

by
May 5, 2011

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 husbandDan Campbell has similar concerns.

To read more, visit: http://sacramento.cbslocal.com/2011/05/03/on-the-money-internet-police/


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