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Category: Marc Lifsher

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California Internet shoppers, beware of the tax collector

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California Internet shoppers this holiday season better hang on to their sales receipts in case the tax collector comes calling.

The state's sales tax collection agency, the Franchise Tax Board, and a coalition of California retailers, the Alliance for Main Street Fairness, warned Tuesday that shoppers could wind up with a tax-due bill if they get audited for Internet purchases.

"Many web sites do not collect sales taxes, but that doesn't mean it is not owed," the alliance said in a "Holiday Shopping Tips" news release.

The agency stressed that if the seller doesn't collect a base 8.25% sales tax on an Internet purchase, then the buyer legally is required to pay a "use tax" at the same rate for the goods.

The release lays out what it calls "five easy steps for complying with sales tax requirements" that -- in reading -- don't seem easy at all.

Step one is check and see if you might be paying the tax. If so, there's nothing more for the buyer to do.

Step two is keep all paper and electronic receipts.

Step three is go online to calculate your local and state use tax rate.

Step four is go back online to get a Use Tax Return form.

Step five is pay your taxes. The easiest way to make the payment is through the annual state income tax return.

What the news release doesn't say is that fewer than 1% of individual Internet shoppers pay the use tax, and that the state doesn't attempt to collect the money on most transactions.

For that reason, California recently passed a new law that would require Internet sales giant and many other e-sellers to start collecting sales taxes and remit them to the state. Amazon has agreed to start doing so in September of next year.

The law, though, does not cover many out-of-state Internet sellers that do not have any bricks-and-mortar or sales affiliation links to California.

To close that loophole, California and other states are lobbying the U.S. Congress to pass a national law that would set uniform rules for all states to collect sales taxes from Internet sellers. A number of bills with bipartisan support are being considered by the U.S. Senate and House of Representatives.

The Board of Equalization estimates that the state loses more than $1.1 billion a year in unpaid use-tax revenue.


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Photo: An Amazon fulfillment center in Goodyear, Ariz. Credit: Ross D. Franklin/Associated Press

Despite gains, California has second-highest jobless rate in U.S.

Despite gains, California had second-highest unemployment rate in the nation in October
Employers in California added the second-largest number of jobs among the 50 states in October, but that strong performance didn't prevent the state from posting the country's second-highest unemployment rate for last month.

The U.S. Department of Labor reported Tuesday that California's unemployment rate of 11.7% -- down from 11.9% in September and 12.5% in October 2010 -- was higher than all states and the District of Columbia, with the exception of neighboring Nevada.

Nevada, which has been hard hit by the downturn in construction that started during the recession of 2007-2009, posted an unemployment rate of 13.4%. Michigan and Mississippi had unemployment rates of 10.6%, and South Carolina was at 10.5%.

The national unemployment rate was 9%, 0.7 of a percentage point lower than what it was a year ago.

North Dakota,with its booming energy industry, reported the nation's lowest unemployment rate: 3.5%.

Overall, 36 states and the District of Columbia recorded unemployment rate decreases in October; five states had rate increases and nine showed no change in joblessness, the Bureau of Labor Statistics said.

The biggest jump between September and October was in Illinois: 30,000 net new jobs. California came in second with 25,700 new jobs. In the last year, California has gained a total of 239,100 jobs, about a fifth of those lost in the recession.

Wisconsin lost more jobs than any other state last month, 9,700, followed by New York with 8,300 and Minnesota with 6,100.


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Photo: Job seekers line up at San Francisco jobs fair. Credit: Justin Sullivan / Getty Images

California unemployment rate edges downward in October


California's unemployment rate fell by two-tenths of a percentage point to 11.7% in October as the state created 25,700 new jobs, the Employment Development Department reported. The agency also reported Friday that it had revised job growth in September upward, to 39,200, from about 12,000.

The national unemployment rate for October was 9%.

The slow-but-steady improvement, economists said, provides solid evidence that California is growing faster than the nation as a whole and is not in danger of plunging into a double-dip recession.

CHART: California jobless rate, October

In the last year, the Golden State posted a net jump of 239,000 jobs, a jump of 1.7%, from October 2010, when unemployment peaked at 12.5%. The national increase was 1.2%.

"We're seeing job growth headed in the right direction, except it's at one very small step at a time," said Kimberly Ritter, associate economist with the Los Angeles County Economic Development Corp.

Statewide, seven categories of employment showed growth in October: construction, information, financial activities, professional and business services, educational and health services and leisure and hospitality. Jobs decreased in the areas of manufacturing, trade and transportation, government and mining and logging, the EDD said.

Unemployment in Los Angeles County also fell by 0.2% to 12.2% in October, the EDD said. Although the county added 19,000 new jobs over the past year, its rate of growth was weaker than other coastal regions and even the Inland Empire.

The Silicon Valley posted the state's strongest jobs expansion over the past 12 months at 3.2%. San Diego had 2%, San Francisco 1.8%, Orange County 1.5% and the Inland Empire 1.4%.

"For the moment, the state's economy is moving toward slowly recovering the jobs lost in the recession and ever so slowly reducing the number of unemployed residents, which still totals over 2 million, said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.


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Photo: Job seeker at Career Partners center in Rosemead. Credit: Los Angeles Times

Consumer advocates call SoCalGas 'smart' meters too costly

The state's official advocate for utility ratepayers has asked regulators to reverse a prior approval of a $1-billion program to install high-tech "smart" gas meters on 6 million homes from Fresno and the Mexican border.

The Division of Ratepayer Advocates, backed by the nonprofit consumer group, the Utility Reform Network, on Wednesday filed a joint petition with the California Public Utilities Commission.

The $1-billion price tag for Southern California Gas Co.'s smart meters would put a financial burden on residential customers, who already are being asked to pay $2.5 billion to upgrade pipeline safety and another $1.6 billion in rate hikes, the two groups said.

The pipeline safety program is a response to the fatal explosion last year of a Pacific Gas & Electric Co. pipeline in San Bruno, south of San Francisco.

"Safety, not smart meters, is the priority for consumers," said Joe Como, acting director of the Division of Ratepayer Advocates. "Circumstances have changed since the [commission] approved these unnecessary meters and in the environment of escalating energy bills, customers should not have to foot the billion-dollar bill for technology that provides them little, if any benefits."

Smart meters are designed to help consumers save energy by being able to monitor their gas use at any time to see how much gas they are using in furnaces, water heaters and stoves. However, the PUC's own investigation estimates that widespread use of smart meters would only cut usage by about 1% over the next 25 years.

Because natural gas can be purchased by utilities ahead of the heating system and stored for months, its price is not as volatile as rates for electricity, critics said, and hour-by-hour monitoring is less helpful as a conservation technique.

The PUC approved the smart meter spending by a 3-2 vote on April 9, 2010.

SoCalGas said it opposes the consumer group's petition and will file a formal response to the PUC this week.


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Photo: Old-style, non-"smart" residential gas meter. Photo: Brent Lewin / Bloomberg

Fresno dairy raw milk products recalled by state


California food safety regulators have placed a recall and quarantine order on raw milk products from a Fresno dairy, Organic Pastures.

All milk products except cheese aged a minimum of 60 days must be pulled from retail stores, and consumers are urged to dispose of any remaining products in their homes, said the California Department of Food and Agriculture.

The quarantine order came after state health authorities identified a cluster of five children infected between August and October with the same strain of the bacteria E. coli 0157:H7 in Contra Costa, Kings, Sacramento and San Diego counties. An investigation revealed that the only common factor was the drinking of raw milk from Organic Pastures.

State milk and dairy food inspectors have begun a full check of the Organic Pastures facilities.

Organic Pastures marketing manager Kaleigh Lutz said that the dairy's own testing has been negative for presence of pathogens. The family-owned company is working with Food and Agriculture to resolve the investigation. Organic Pasture's organic beef, raw cheese and organic pastured eggs are not affected by the recall.

Symptoms of E.coli infection include abdominal cramps and diarrhea, which is often bloody, officials said. Most people recover within a week, but some victims need to be hospitalized.


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Photo: A cow whose milk has not been subject to a California recall is being milked for fans of nonpasteurized milk. Credit: Ted S. Warren / Associated Press

California ratepayer advocate complains of high solar power costs

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California consumers will be paying too much for electricity generated by a large solar-thermal power plant being built in the Mojave Desert, the state's independent ratepayer watchdog agency said.

The Division of Ratepayer Advocates questioned the California Public Utility Commission's 4-1 vote Thursday to approve the Mojave Solar Project's 25-year power contract with Pacific Gas & Electric Co.

"The commission has the power to keep the cost of renewable energy reasonable," said the division's acting director, Joe Como. The commission, he said, "is signaling to the market that California will accept overpriced renewable energy and that it is willing to lock customers into higher rates for decades to come."

In a statement, the PUC confirmed that the contract "is more costly than other procurement opportunities available to PG&E," but said it "determined that the value of adding the Mojave Solar Project to California's fleet of renewable energy generation capacity warranted approving the project."

The contract had to be renegotiated higher because of an expected delay in upgrading the transmission network, the PUC said.

 PUC Commissioner Mark J. Ferron said he has "high confidence" that the Mojave plant will get built.

"The technology is tried and true, the financing is all wrapped up with the U.S. Department of Energy loan guarantee," he said, "and we're told that the hard hats are on and the bulldozers are ready to roll."


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Photo: Mirrors concentrate solar power at Mojave Desert power plant. Credit: PBS

Bipartisan trio of U.S. senators to introduce federal sales tax collection bill


Congressional efforts to pass a nationwide law enabling all states to collect sales taxes on Internet purchases is gaining momentum.

A bipartisan trio of senators scheduled a Wednesday morning briefing with reporters to unveil legislation dubbed the Marketplace Fairness Bill.

The proposal is backed by Sens. Richard J. Durbin (D-Ill.), Lamar Alexander (R-Tenn.) and Michael B. Enzi (R-Wyo.).

The bill, one of at least three now in Congress, comes as California and other states battle with Internet retail giant over the sales tax. Amazon has agreed to start collecting sales taxes in California beginning in September 2012. The company fought an earlier state law by threatening to wage a referendum campaign to overturn the measure, calling it unconstitutional.

The new federal legislation gives states two ways to collect billions of dollars in unpaid sales taxes when consumers buy products from Internet sellers, such as Amazon, or States that become part of a multi-state legal agreement and bring their sales tax codes into conformity with other states can compel Internet retailers to charge and remit the sales tax.

But other states that don't sign the interstate compact still could collect the taxes if they adopt minimum standards to simplify the levies.

The Durbin-Alexander-Enzi bill would exempt all sellers with annual sales of less than $500,000 from collecting individual state sales taxes.

A fact sheet distributed by their offices stressed that the measure "does not create new taxes or increase existing taxes." 


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Photo: An Amazon distribution center in Goodyear, Ariz. Credit: Ross D. Franklin / Associated Press

Amazon workers complain of heat, cold at Pennsylvania facility

Amffctrphoejoshualottbb, the world's largest Internet retailer, got lots of scrutiny in September when a Pennsylvania newspaper published a story about workers fainting and suffering other heat-related health problems when temperatures rose to triple digits inside a local distribution center.

Now, employees at Amazon's Breinigsville, Pa., facility are complaining that they're being left out in the cold.

They were forced to spend hours outside in nighttime temperatures in the 20s after they had to leave the building without coats when fire alarms sounded a year ago, the Morning Call newspaper reported last week. Several people required medical attention.

Amazon subsequently changed its evacuation policies and provided employees with cold-weather gear and hand warmers, the newspaper said. The company also said that it had installed air conditioning at the same order-fulfillment center following heat waves last summer.

Both the summer and winter incidents prompted investigations by the federal workplace safety agency, the Occupational Safety and Health Administration.

Amazon released data to the Morning Call showing that its incidence of worker injury and illness, as reported to OSHA, in U.S. warehouses between 2006 and the third quarter of 2011 was lower than the rates reported by general warehousing, automobile manufacturing and department stores.


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Photo: Amazon fulfillment center in Phoenix. Credit: Jushua Lott / Bloomberg

California state housing agency reverses on foreclosures

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A state-run housing agency at least temporarily has suspended the practice of foreclosing on a small number of borrowers who rented out their homes.

The office of Senate President Pro Tem Darrell Steinberg (D-Sacramento) on Friday announced that the California Housing Finance Agency had agreed to his request to halt the foreclosures, even though the homeowners had not fallen behind on their monthly payments.

Earlier this week, Senate investigators issued a report that said the agency, known as CalHFA, initiated or threatened foreclosures on about 200 borrowers because they were no longer living in the homes as required by state regulations and interpretations of federal tax law.

The borrowers, who owed more on their properties than their market values, moved out for a variety of personal reasons but did not want to sell the homes at losses.

"The agency is making the right decision during difficult economic times," said Steinberg. "Struggling families, who are working to do the right thing in meeting their obligations, shouldn't be saddled with an extra, unnecessary burden."

The agency said it finances $4.2-billion worth of low-interest mortgages through the sale of tax-free bonds. U.S. Internal Revenue Service Rules specifically prohibit that the money from the sale of bonds be lent to home buyers who do not live in the properties.

Nevertheless, the agency in a letter to Steinberg and Senate Housing Committee Chairman Mark DeSaulnier (D-Concord) said it asked its board of directors to revisit the issue of owner-occupancy at its January board meeting. In the meantime, it is temporarily ceasing foreclosure proceedings  against "those who may be renting out their residence while staying current on their payments."

DeSaulnier said he is asking the agency to make the change permanent. "CalHFA serves predominately low-income, first-time home buyers," he said. These Californians should not fear foreclosure when they are doing everything right."


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Photo: A foreclosed Glendale home in September. Credit: Kevork Djansezian / Getty Images

California lifts suspension of green energy tax credit


Members of a state commission unanimously voted to lift a month-long suspension of an alternative energy-related tax credit that had been imposed following the bankruptcy of Solyndra, a politically connected California solar panel company.

The California Alternative Energy and Advanced Transportation Financing Authority, after reviewing its operations and the granting of $25.1 million in sales tax credits to Solyndra, concluded it could tighten the way it handles applications.

Joe DeAnda, a spokesman for the commission's chairman, state Treasurer Bill Lockyer, called the program "transparent and accountable." But he noted that "we can improve the way we evaluate applicants."

Solyndra, which used a $535-million federal loan guarantee to open a factory in Fremont, Calif., filed for bankruptcy protection Sept. 6. The announcement set off a political controversy in Washington, with allegations that the Obama administration pressured U.S. Department of Energy officials to approve the assistance despite warning signs that the company was in trouble.

California's support for Solyndra was much smaller than the federal government's. Solyndra was one of 26 companies that have participated in the California program.

State Sen. Alex Padilla (D-Pacoima), who held a hearing on the Solyndra case as chairman of the Energy, Utilities and Communications Committee, said he supported the state commission's decision to restart the tax credit. At last week's hearing, a number of executives from solar panel manufacturing companies praised the tax credit for making it possible for them to build and operate plants in California.

"The facts provided at the hearing show that the program is working as intended," said Padilla. "California-based green jobs are being created."

The state Legislature will act to improve oversight of the alternative energy tax credit, Padilla said, "but we must not let the failure of one company deter us."


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Photo: Workers install solar panels at the Sacramento Municipal Utility District. Credit: Rich Pedroncelli/Associated Press

California employers add 11,800 new jobs in September


California's unemployment rate dipped below 12% in September, and nearly 12,000 new jobs were created.

The jobless rate fell to 11.9%, from 12.1% in August, according to the California Employment Development Department.

Non-farm jobs totaled 14.1 million, a jump of 11,800 over August. In August, the state gained 21,100, according to EDD data that was revised upward.

Interactive: California‚Äôs unemployment rate by county

In all, California employers have added 250,600 net new jobs during the past 12 months. The trend over the last two months is modestly encouraging, said Howard Roth, chief economist for the state Department of Finance.

"I'd say it's a good gain in jobs, better than what we've been getting," he said.

Five categories of employment rose in September, with the biggest increase in professional and business services at 13,300. Six categories lost employment, including manufacturing, information, financial and health services. The largest decrease was in the government, a loss of 7,000 jobs.

California in September had the second-highest unemployment rate in the nation, behind only Nevada with 13.4%. North Dakota had the lowest rate at 3.5%, while the national rate was 9.1%.

Unemployment in the Los Angeles-Long Beach-Glendale metropolitan area was 12.4%.


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Photo: Job-seekers meet with recruiters at a Dell career fair in Santa Clara.  Credit: Justin Sullivan / Getty Images


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