By Jim Christie
SAN FRANCISCO (Reuters) -
A California bill that could lead
to a tax on Internet music downloads faces slim odds of
success, but the Democrat who wrote it says a debate over
taxing such online retail transactions is overdue.
Assemblyman Charles Calderon told Reuters late on Thursday
that California should consider imposing a tax on entertainment
downloaded from online merchants such as Apple Inc's iTunes
that is similar to the state's levy on music compact discs sold
in stores.
Sales taxes should apply equally to online and in-store
purchases and California is missing out on revenues from the
rise of Internet retailers, Calderon said.
"If you walk into Wal-Mart and buy a CD you walk out paying
a tax," Calderon said. "I don't think we're talking about a new
tax here. We're talking about whether our laws should keep up
with the economy."
Calderon's bill would require California's Board of
Equalization to report to lawmakers on the potential for
imposing a sales tax on electronic transmissions of
information.
For Republican lawmakers that is too close to a new tax.
They will kill the bill along with other legislation
Democrats advance to raise existing taxes or introduce new
ones, Mike Villines, the state Assembly's Republican leader
told Reuters. "We just disagree with it on the merits," he
said.
Calderon's bill comes as California faces a $7.5 billion
state budget shortfall. Republican Gov. Arnold Schwarzenegger
has ruled out raising taxes to fill it and has instead proposed
deep spending cuts.
Democratic lawmakers say the proposed cuts are drastic and
some are urging tax plans to help close the shortfall, which is
taking on added urgency in the state capital of Sacramento as
school districts across the state prepare for reduced state
financial aid.
Many are beginning to issue layoff notices to bolster their
finances and education groups are increasing pressure on
lawmakers, especially Democrats, to defend education from
spending cuts.
The bill fell short of a required two-thirds support as all
Assembly Republicans voted it down.
(Editing by Tom Hals)
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