CBS Slants Towards Supporters of Online Sales Taxes

CBS's John Blackstone apparently couldn't find many opponents of imposing sales taxes on online retailers for his report on Thursday's Early Show, as all but one of his sound bites came from proponents. Blackstone also warned that "states that are already suffering under huge budget deficits will lose more than $11 billion in uncollected sales taxes next year."

The correspondent first outlined that "for many online shoppers, the checkout screen noting zero sales tax seems a good reason to buy on the Internet. But now, a new law in California requires online retailers to collect sales tax. And Amazon, the world's biggest Internet retailer, with 34 billion [dollars] in sales last year, isn't happy." He then played two clips from a member of California's "board of equalization," which oversees the state's sales, alcohol, and tobacco taxes, who vouched for the new levy: "You have the obligation to collect the tax on behalf of the consumer, and remit it to the State of California."

Later, Blackstone played his sole clip from an opponent of online sales taxes, an Amazon executive who directed a threat at the State of South Carolina for trying to impose such a tax there.  But he followed this with four more sound bites from supporters (including from an unidentified woman who stated she would "rather pay the extra bucks and come to an actual bookstore") as he outlined the revenue at stake for the states:

BLACKSTONE: ...[I]n South Carolina, Amazon shut down construction of a huge distribution center when the state considered a new sales tax law.

PAUL MISENER, AMAZON VICE PRESIDENT (from online video): We just canceled $52 million worth of investments and contracts in the state.

BLACKSTONE: South Carolina backed off and construction resumed.

NEAL SOFMAN: They're doing business. Why shouldn't they collect sales tax like everyone else?

BLACKSTONE: Neal Sofman runs a small San Francisco bookstore, and says it's hard enough competing against the Internet giant.

SOFMAN: They, quite simply, want an advantage. You know, they don't want to play by the rules.

BLACKSTONE: It's estimated that nationwide, states that are already suffering under huge budget deficits will lose more than $11 billion in uncollected sales taxes next year. California alone could lose nearly $1.3 billion.

YEE: These are important dollars that could support vital public services like public education.

The full transcript of John Blackstone's report, which aired 42 minutes into the 7 am Eastern hour of Thursday's Early Show:

CHRIS WRAGGE: For years, Internet companies have argued with states over collecting sales tax on the items their customers buy online. Now, the latest dispute pits two giants against one another- Amazon.com versus the State of California, with hundreds of millions of dollars at stake.

CBS News correspondent John Blackstone has this report.
               
JOHN BLACKSTONE: For many online shoppers, the checkout screen noting zero sales tax seems a good reason to buy on the Internet. But now, a new law in California requires online retailers to collect sales tax. And Amazon, the world's biggest Internet retailer, with 34 billion [dollars] in sales last year, isn't happy.

BLACKSTONE (on-camera): So Amazon- they're looking at any way they can-

BETTY YEE, CALIFORNIA BOARD OF EQUALIZATION: Exactly-

BLACKSTONE: They can to get out of this tax?

YEE: Exactly, exactly.

BLACKSTONE (voice-over): Betty Yee, a member of California's tax board, says Amazon and other online stores are simply being told to do what other retailers do.

YEE: You have the obligation to collect the tax on behalf of the consumer, and remit it to the State of California.

BLACKSTONE: Amazon launched an expensive campaign to overturn the law through a ballot measure, putting the issue into the hands of California voters. The company declined to be interviewed but issued a statement, saying, 'Californians deserve a voice and a choice about jobs, investment and a state's economic future.'

BLACKSTONE (on-camera): Not just here in California, but across the country, Amazon has aggressively fought back whenever a state government has tried to force the company to collect sales taxes for online purchases.

BLACKSTONE (voice-over): At least 15 states have moved toward requiring Amazon to collect sales tax. In New York, Amazon is challenging a sales tax law in court. And in South Carolina, Amazon shut down construction of a huge distribution center when the state considered a new sales tax law.

PAUL MISENER, AMAZON VICE PRESIDENT (from online video): We just canceled $52 million worth of investments and contracts in the state.

BLACKSTONE: South Carolina backed off and construction resumed.

NEAL SOFMAN: They're doing business. Why shouldn't they collect sales tax like everyone else?

BLACKSTONE: Neal Sofman runs a small San Francisco bookstore, and says it's hard enough competing against the Internet giant.

SOFMAN: They, quite simply, want an advantage. You know, they don't want to play by the rules.

BLACKSTONE: It's estimated that nationwide, states that are already suffering under huge budget deficits will lose more than $11 billion in uncollected sales taxes next year. California alone could lose nearly $1.3 billion.

YEE: These are important dollars that could support vital public services like public education.

BLACKSTONE: In reality, all consumers are supposed to pay sales tax, whether they buy in a store or online. But since online businesses have been largely exempt from collecting sales tax, those who actually go out to shop have been paying for the privilege.
                               
UNIDENTIFIED WOMAN 1: I'd rather pay the extra bucks and come to an actual bookstore.

BLACKSTONE: However, plenty of Californians have made the choice to pay less and shop online. Amazon will be encouraging them to vote to keep the sales tax loophole open. John Blackstone, CBS News, Sacramento.

WRAGGE (on-camera): If Amazon gets half a million voters to sign the petition over the next two months, the issue would be on the California ballot in February.