States Push for Online Sales Tax Pay Out - Central Coast News KION/KCBA

SALINAS, Calif. -- States are pushing for an online sales tax pay-out.  If we taxed online shopping at places like Amazon, Overstock and EBay the state would bring in more than 4.2 billion dollars!

Most people don't realize how much money the spend online, but if they take a look at their receipts that money adds up real quickly and right now cities are losing out on that money.

Forrester Research says the average online shopper will soon spend about $1,700 a year. In total, that would cost each person about $125 dollars a year in taxes. In turn that would add $23 billion to our state government. 

If Internet sales taxes were collected from online purchases, states estimate a $20 billion pay out. Salinas Mayor Dennis Donohue said shopping online and not spending money in the local stores may be cheaper, but it's bad for the city's bottom line. "I'll speak from a city perspective. The one thing I am very clear on is people value their city services," said Donohue.

Dennis Donohue said there is no way for the city to track how much money its lost in sales tax revenue from people shopping online, but as an example... "If it took $200,000 or a half a million the impact could be two to four police officers I'd say," said Donohue.

We asked around and most all cities on the Central Coast are behind the online tax push saying they want a piece of California's possible $4.2 billion cut from the online tax. "The online services still have the cost advantage they're looking for. So the simple addition of taxes doesn't change that but it help cities," said Donohue.