Amazon Tax Fight With California Might End Soon
A special deal might end the tough tax fight between the State of California and retail giant Amazon.com Inc. Gov. Jerry Brown is scheduled to consider this deal, which would give Amazon.com a one-year break from collecting state sales tax in return for dropping a campaign to produce a ballot measure to stop that tax, according to news reports.
The deal would cool down a heated argument on this tax question. Last month, the California Senate Appropriations Committee approved AB155. It demanded out-of-state retailers such as Amazon.com collect sales tax, which they have not done since the early days of e-commerce, when it was a struggling industry.
When some Democrats sponsored similar bills early in the year, Amazon.com and other out-of-state retailers responded in June by cutting ties with their California affiliates, or publishers of websites that post advertisements and coupons for e-commerce retailers on their websites. The result was a significant loss of income for affiliates, according to Rebecca Madigan, executive director of Performance Marketing Association, a trade group for affiliates.
If a deal is made, ties to affiliates should be restored, she wrote in a Sept. 8 blog on the trade group’s website. However, the deal left her with more questions.
“Is this a deal purely for Amazon or would it apply to other out-of-state retailers? There is no indication at this time,” she wrote.
The possible deal was met with anger by Sen. Loni Hancock (D–Berkeley), who had sponsored earlier legislation requiring Amazon.com to collect state sales tax. On Sept. 6, she; Bill Dombrowski, president of the California Retailers Association; and other state senators supporting AB155 held a press conference arguing against a deal.
“The Amazon deal offers nothing to the taxpayers of California,” Hancock said in a statement.
