Be honest: How many of you shop online to avoid paying sales taxes? Ah, look at all those hands!

Now, how many of you know that you're required to pay taxes on online purchases? Wow, listen to all those crickets!

But watch how Amazon spins its effort to get an initiative on the ballot to repeal the so-called Internet tax law. They'll tell you: "The government wants to raise your taxes!"

The government is doing no such thing. California already imposes state taxes on out-of-state purchases on businesses with an in-state presence, and that includes purchases from online retailers like Amazon.

As the State Board of Equalization will tell you, you are required to remit a "use tax" if sales taxes aren't collected at the point of sale. That law has been in effect since 1935 and upheld repeatedly by the courts.

Because that law was unenforceable, however, California lawmakers recently enacted a new law requiring large online retailers to collect taxes from residents. Simply put: California was merely trying to find an efficient way to collect what it was already owed.

You will hear shrieks of, "They're raising taxes on business!" No. Businesses don't pay sales taxes; they collect them. Consumers pay sales taxes. But that's rare in cyberspace because consumers can get away without paying, and Amazon knows it. Their business thrives on the tax delinquency of their customers because not collecting sales taxes makes them more competitive against brick-and-mortar stores. Their own financial disclosures state that potential sales tax collection in California and elsewhere would "reduce future sales."

Another claim: The law punishes thousands of California small businesses affiliated with Amazon.

To explain: Affiliate marketing is basically the Internet equivalent of a referral. When you click an Amazon link on, say, Mary'sQuilts.com, Mary gets a cut of the proceeds from whatever you buy on Amazon. In reaction to the new law, Amazon cut its ties with California affiliates. Result: No more referral fees for California online businesses. They lose money, go out of business, maybe leave the state. "Job killer!" cry Internet tax opponents.

Wait: I'm supposed to be sympathetic to businesses that were taking advantage of a loophole that never should've existed in the first place? It's like a gas pump accidentally set at $1 a gallon and motorists lining up to advantage themselves of an existing flaw. You don't complain when that gets corrected; same thing here.

This is part of a larger and consistent glitch in the 21st century: Traditional institutions upon whose methods and practices we've habitually relied are forever playing catch-up with new and shifting paradigms. Those adjustments, though necessary, irritate us. Ultimately, that's all this Amazon tax flap is about: Traditional institutions reacting to new paradigms that have been running laps around an arcane template.

Take Quill v. North Dakota. The U.S. Supreme Court ruled you could only require an out-of-state company to collect sales taxes from residents if the company had a presence in that state. Merely selling goods to residents through the mail – like catalog sales – doesn't meet the "presence" test. But who was shopping on the Internet when the court said that in 1992?

The playing field has changed and California is simply playing catch-up to account for a new paradigm, the Internet. Amazon seems to think that cutting off affiliates would absolve it of any obligation to collect taxes under the California law, but Amazon's other activities here make it hard to claim it has no California presence.

The Amazon office that designs the Kindle is in Cupertino. The division that builds its product search engine is in Palo Alto. Check its jobs page. It is hiring dozens of people here in addition to the thousands already employed here.

Amazon knows it has a physical presence here. That's why it launched a multimillion-dollar political offensive with a ballot initiative to overturn California's law – another flaw in our institutions, incidentally: The petition initiative process Hiram Johnson first envisioned as a voice for voters is now a tool for those with big bucks – and that ain't voters.

I suspect Amazon will succeed on this second front. Though it has no intellectually sound arguments against collecting taxes from residents, Amazon will tap anti-tax emotions to ensure customers can continue to not pay taxes they already owe. If Amazon really believed it was right, instead of spending millions to bankroll a ballot measure, it would go to court here.

Be honest: If the loopholes hadn't existed and you'd been forced to pay taxes from the beginning – as was legally required – would you not have shopped online? Well, maybe if the loopholes hadn't existed from the beginning, we wouldn't be having this discussion now.

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Bruce Maiman is a former radio show host living in Rocklin. Reach him at bruce maiman@gmail.com.

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