On June 30, The Drudge Report featured the following, outrageously false headline as its top story:

California taxing the internet?! That would be a big story, if it were even remotely true. Here's what actually happened: California passed legislation requiring online retailers to collect sales taxes. Drudge sees this and declares California is “tax[ing] the internet.”

From the Los Angeles Times article to which Drudge links:

Beginning Friday, a new state law will require large out-of-state retailers to collect sales taxes on purchases that their California customers make on the Internet -- a prospect eased only slightly by a 1-percentage-point drop in the tax that also takes effect at the same time.

Getting the taxes, which consumers typically don't pay to the state if online merchants don't charge them, is “a common-sense idea,” said Gov. Jerry Brown, who signed the legislation into law Wednesday.

The new tax collection requirement -- part of budget-related legislation -- is expected to raise an estimated $317 million a year in new state and local government revenue.

[...]

Brown's signature on the budget bills is aimed at closing a loophole that freed Amazon and other out-of-state retailers from collecting sales taxes for California.

Not collecting sales taxes gave Internet retailers a competitive price advantage over California's small businesses such as independent booksellers and big-box retailers with a presence in the state, including Barnes & Noble Inc., Wal-Mart Stores Inc., Best Buy Co. and Target Corp.

“You can't give one segment of retail a 10% discount every day. It's just not fair,” said Bill Dombrowski, president of the California Retailers Assn., a major player in a coalition of large and small stores supporting the legislation.

California's new requirement will generate badly needed state revenue and send a signal to Congress that “we want to see a national solution” to the issue of taxing Internet sales, Dombrowski said.

California is the seventh and largest state in the country to pass a law to collect taxes on out-of-state Internet sales. Illinois, Arkansas and Connecticut acted earlier this year, North Carolina and Rhode Island in 2009 and New York in 2008. Amazon sued to overturn the New York law and lost in the lower courts. The company is paying sales taxes into an escrow account pending an appeal.

Other states currently are considering similar sales tax collection bills.