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Tuesday, July 12, 2011

Amazon.com Goes to War with State of California over Online Sales Tax

Posted By on Tue, Jul 12, 2011 at 2:00 PM

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Nobody expected that Amazon.com would take kindly to California legislators' decision to force the mammoth web retailer to collect state sales tax. As part of the recently approved, arduously deliberated state budget, California is now requiring out-of-state companies such as Amazon to slap the tax on goods sold online.

Well, now it's on. A lobbyist working for Amazon filed paperwork at the end of last week to begin the process of seeking a popular referendum that could overturn the tax. If the petition gets the 433,971 necessary signatures, voters will have a chance to strike down the measure.

This could cause some problems, not least because the balanced budget approved by legislators and signed by Governor Jerry Brown counts on $200 million in added revenue from new collections of sales tax from out-of-state businesses. Tax board member Betty T. Yee issued a statement yesterday condemning the push for a referendum.

"It is in every Californian's interest for online and storefront businesses to play by the same rules," she said. "I strongly doubt Californians will support a loophole promoting out-of-state jobs, when holding Amazon.com accountable to the same rules as everyone else protects California's economy."

Amazon, meanwhile, is framing the tax measure as a job-killer that is ill-timed for the ongoing recession. "We support this referendum against the recent sales tax legislation because, with unemployment at well over 11 percent, Californians deserve a voice and a choice about jobs, investment, and the state's economic future," said company spokesman Paul Misener, according to the San Francisco Chronicle.

If the referendum goes ahead, we could have yet another chance to see how California's fourth branch of government can wreak havoc with the best-laid plans of the folks we elect.

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Peter Jamison

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