Online tax bill has passed California Legislature

California lawmakers have passed a bill to force out-of-state Internet retailers such as Amazon.com Inc. to collect taxes under two different legal theories, both of which have been criticized by online sellers.

One approach requires online sellers to collect tax if they have affiliates in California that refer shoppers to their site. Similar efforts in other states generated opposition because online retailers responded by severing relationships with in-state affiliates, often small businesses. Amazon has said it would do the same in California.

In a more novel approach, the bill requires an online retailer to collect the tax if it has sister companies in California, such as a marketing arm or product developer.

Source: http://www.businessweek.com/ap/financialnews/D9NVL82O0.htm