In a move that grabbed attention among the technology and retail business communities, three senators—Sen. Mike Enzi (R-WY), Sen. Dick Durbin (D-IL) and Sen. Lamar Alexander (R-TN)—introduced legislation aimed at allowing states to require online-only, out-of-state retailers to collect and remit to states tax on sales made to residents of those states.

In a press release, the three senators touted their legislation as an effort to give states “the option to collect sales and use tax revenues from out-of-state sellers through a new, simplified tax system,” but “only if they adopt certain minimum simplification requirements and provide sellers with additional notices on the collection requirements.”  The Enzi-Durbin-Alexander bill also “exempts sellers who make less than $500,000 in total remote sales in the year preceding the sale.”  It reportedly has the support of big bricks-and-mortar retailers like Wal-Mart and Home Depot, as well as Amazon.com.

In multiple states around the country over the past year, legislators and officials have been looking to sales made by out-of-state, online-only retailers as a potential revenue stream capable of being tapped in order to help fill budget holes. California has been notably aggressive in pursuing a so-called “Amazon Tax,” which would force retailers like Amazon.com and O.co to collect and remit to the state sales tax on sales made to Californians.

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Monday night’s episode of The O’Reilly Factor, the number one show in cable news, features an unusual collaboration between FOX and CBS as Steve Kroft of 60 Minutes joins Throw Them All Out author and Breitbart editor Peter Schweizer to discuss insider trading in Congress.

In less than a week, Schweizer’s book–which documents suspicious trades by members and leaders of both parties has upended Washington, DC, prompting hearings to be scheduled in both the Senate and House and shining public scrutiny on a previously hidden avenue of potential corruption and political self-enrichment.

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In 2007 Google decided it wanted a more permanent role in the political game. The company launched its D.C. public policy headquarters the following January. Google and policy makers in D.C. were excited to see this step being taken by the tech giant; the expectation was that Google would take the system by storm.

Over the last three years Google has been highly invested in the public policy process and in many cases they have molded policy to their whims and desires. In 2008 Barack Obama ran as a pro-net neutrality candidate and Google jumped on that bandwagon donating $814,540  to the campaign.  His opponent, John McCain received less than $100,000. Additionally another million  dollars was provided by Google to MoveOn.org. This grand show of support was in hopes that it would ensure Google Federal Communications Commission support for Net Neutrality. For the most part they got it. And that policy looks to stick, for now, after last week’s inaction by Congress, allowing the FCC to start passing law for the United States.

Though recently it appears Google has begun to realize a valuable lesson about the world of D.C. politics, when the Department of Justice and Federal Trade Commission announced they would be investigating Google for monopoly practices.

Recently, Eric Schmidt, executive chairman of Google, spoke with the Washington Post after his first appearance for congressional testimony, and the “take D.C. by storm” expectation certainly appeared to be catching up with Google as Schmidt vocalized his frustration.

“So we get hauled in front of the Congress for developing a product that’s free, that serves a billion people. OK? I mean, I don’t know how to say it any clearer,” Mr. Schmidt stated to the Post. “It’s not like we raised prices. We could lower prices from free to . . . lower than free? You see what I’m saying?”

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California recently instituted as part of its budget solution an “Amazon Tax” aimed at forcing out-of-state, online retailers with no physical presence in the Golden State to collect and remit sales tax in respect of goods sold to Californians where the retailer in question advertises, or maintains an “affiliate” referral relationship, with websites based within state lines.

Prior to passage of the bill obligating collection and remittance in such circumstances, prominent online retailers including Amazon.com and Overstock.com had threatened to terminate relationships with affiliates, if the legislation became law.  Now that it has, and affiliate relationships are being severed, something critics of the legislation say was entirely foreseeable is occurring: Online businesses and entrepreneurs are leaving the state, thus risking an actual reduction, as opposed to marginal increase, in California’s tax revenue.

Last month, news broke of one California-based online entrepreneur who had decided to ditch California and move to Nevada in the aftermath of Gov. Jerry Brown signing the law.  ”I always figured that in California, home to Silicon Valley and a million tech startups, they’d never pass a law like this,” said Nick Loper, who formerly operated ShoesRUs and has now opened a new venture, ShoeSniper.

Per the piece in which Loper is quoted, more than 70 affiliates had at that stage already left California, according to online businesses.

Then, last Thursday, another online entrepreneur, Erica Douglass, posted a mock “It’s Over” letter to California on her blog. Douglass, who sold an internet company she had built for $1.1 million in 2007 when she was just 26, cited multiple reasons for moving to Austin.  Among them were unnecessary paperwork requirements mandated by the state, and high taxes as well as business fees.  However, the straw that broke the camel’s back, was according to Portfolio, Brown signing the Amazon Tax into law.

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California lawmakers thought they were targeting Amazon.com, the out-of-state giant, when they voted last week to force Internet retailers to collect sales tax.

It turns out eBay Inc., California’s own golden child of e-commerce, isn’t so thrilled about it, either.

The San Jose online auction company says the legislation would hurt its business model, which relies on thousands of entrepreneurs who sell goods on its site.

The intent may have been to go after Amazon, but “we’re literally caught in the crossfire,” said David London, senior director for state government relations at eBay.

Big Government recently noted that the Texas legislature voted to ram through a California-style tax-hiking “Amazon Tax” bill.

Gov. Rick Perry subsequently vetoed that bill, but Big Government has learned that Texas legislators have renewed their push for policy that is unconstitutional on its face by wrapping their proposal into SB 1, Texas’ fiscal matters bill, which is under consideration by the Texas House.

Texas conservative groups and leaders have been working to get the “Amazon Tax” provisions stripped out of that bill.  However, those efforts appear to have been unsuccessful to-date. As the Dallas Morning News reports, House members are persisting in their pursuit of the tax hike.

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California’s proposal to institute an “Amazon Tax” took another major step forward last week.

The last of three bills aimed at getting the Seattle giant and other out-of-state online retailers to pay sales tax passed the Assembly on Wednesday afternoon.

“It’s something we’ve been working on for years,” said Assemblywoman Nancy Skinner, D-Berkeley, who authored the bill. “But this is the first time that so many businesses up and down the state are supporting it.”

A companion bill, authored by Assemblyman Charles Calderon, D-Whittier (Los Angeles County), passed the full floor on a 47-16 vote on Tuesday.

“This bill levels the playing field for businesses in California,” said Assemblyman Bill Berryhill, R-Ceres (Stanislaus County). “Not a day goes by when I don’t hear from businesses about their ability to compete.”

Which is what supporters of the so-called e-fairness legislation have been shouting from the rooftops for years, despite vetoes from former Gov. Arnold Schwarzenegger and dire threats from Amazon.com (2010 profit: $34 billion) and Utah’s Overstock.com to pull their affiliate business out of the state.

Assemblyman Berryhill was the lone Republican to back the bills; now both AB 153 and 155 will head to the Senate for approval, while Senate bill 234, another “Amazon Tax” bill, is anticipated to be taken up by the Assembly.  Democratic Gov. Jerry Brown still hasn’t voiced an opinion either way on any of the bills.

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California Democrats are about to initiate a big effort to ram through bills that would force out-of-state, online-only retailers with no physical presence in the state to collect and remit to California sales/use taxes. Starting with a press conference today, they are pursuing three different approaches.

The first is Assemblywoman Nancy Skinner’s AB 153, otherwise know as the affiliate nexus approach. As previously reported, the bill would force out-of-state online-only retailers who use websites based in the state– including eBay– to advertise to collect and remit California sales and use taxes.  Amazon and Overstock have threatened to terminate affiliate contracts to keep themselves out of California’s tax net if this bill passes.

The second, deeply problematic bill is SB 234 which enacts “long arm” nexus and allows the Board of Equalization (BoE) a virtual unfettered ability to force anyone it wants, no matter who or where they are, to collect and remit to California sales and use taxes. Critics charge that in addition to enabling tax-hiking and the imposition of new taxes, and extending massive authority to the BoE, if this bill becomes law, it will provoke costly litigation that California is likely to lose.

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As California Democrats continue to press for an unconstitutional new tax scheme targeting out-of-state, online retailers, it has emerged that an additional two retailers alleged to be backing the effort themselves decline to collect and remit tax on Internet sales made to customers resident in states in which those retailers maintain no physical presence.

Recently, Capitol Confidential reported on what was described by critics as hypocritical behavior on the part of retail powerhouses Target and Bloomingdale’s.  Now, research indicates that Macy’s and Saks Fifth Avenue—both alleged to be lower-profile backers of the so-called “Amazon tax” proposal and both competitors of Overtsock.com, itself a major target of the legislation—engage in the same behavior.

The below screenshot shows an online purchase initiated at Macy’s website by a customer in Nebraska, a state in which Macy’s maintains no physical presence.  The relevant webpage indicates that Macy’s intends to collect and remit no Nebraska sales tax on the transaction.

Meanwhile, this Saks purchase initiated using a zip-code for Arkansas—a state in which Saks has no stores—likewise indicates that Saks intends to collect and remit no Arkansas sales tax on the transaction.

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Capitol Confidential has previously reported on legislation introduced by California Democratic Assemblywoman Nancy Skinner that seeks to impose a new, and unconstitutional, tax on out-of-state, online retailers including (ironically) a number of eBay users.  Capitol Confidential has since learned that a prominent corporate sponsor of such efforts is retail giant Target, and that a number of other big retailers back the legislation, too.  According to one source, that group includes Bloomingdale’s.

So what if neither Target nor Bloomingdale’s collected and remitted sales/use taxes in states where they sell online to customers but in which they maintain no physical presence (the practice Skinner’s bill aims to ban by redefining the concept of “nexus”)?  Based on what appears on both companies’ websites when one inputs an order using the data of a resident of such states, it appears both corporations are willingly taking advantage of the same constitutional case law as the online retailers targeted by Skinner’s legislation to avoid tax liability.

Here is a screenshot of the “review” page related to a Target transaction input using a Vermont customer’s information. Target’s website indicates that there are no Target stores in Vermont, and this is the final page at which customers can make adjustments, or discard the transaction:

No sales or use tax appears as a line item in the transaction, and the asterisk next to the $0.00 figure merely points to a line saying “why has sales tax been applied?” (which in this case, it has not).

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Amazon.com, the online retailing powerhouse, last week announced a shift in stance on net neutrality that has tech policy observers in the nation’s capital buzzing.

The company, a long-time backer of the controversial policy and member of the pro-net neutrality Open Internet Coalition, signaled in an op-ed by its Vice President for Global Public Policy, Paul Misener, openness to a compromise measure, which would allow what are known as “managed services” to be offered by Internet Service (ISPs) subject to certain conditions.

Specifically, Misener argues that “Internet content providers (and consumers) should be able to purchase ‘quality of service’ or ‘managed services’ from network operators on the same basis–equal availability and no harm to other content.”

Previously, net neutrality proponents had been unwilling to sanction the marketing of such services, irrespective of equal availability or non-prejudicial impact—a position still held by many on the “pro” side of the debate.

The shift was therefore dubbed a “major departure” by one expert tracking the net neutrality debate with whom Capitol Confidential spoke, and one that could have significant ramifications for the way the net neutrality battle plays out moving forward.

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