CA Bill Would Collect Tax From Online Sales

Sacramento - California would collect more of the taxes people owe when they buy items online from out-of-state companies under a bill that is moving through the state Legislature over the objections of Amazon.com and other Internet retailers.

An Assembly committee on Monday heard testimony on the bill, which would make online sellers collect the sales tax if they have a sister company in California.

Currently, online retailers with no California stores do not collect tax from California customers. Customers are supposed to pay the tax to the state, but many do not. An analysis of the bill says that costs California more than $1.1 billion a year.

Retailers with a physical presence in California, including Wal-Mart Stores Inc., support the bill, but Internet retailers say it's an illegal restraint of trade.