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Some readers of this blog have been asking why the legislature and Gov. Jerry Brown, in their view, “caved” and permitted online retailer Amazon.com to not collect sales taxes for another year as part of legislation signed this week.
The answer: the legislature and Brown didn’t surrender on this one.
The governor, by signing the legislation, achieved several objectives. He ended a referendum that Amazon had pursued of legislation requiring online retailers to pay sales taxes.
In doing so, he avoided adding another costly ballot fight next year – a fight that might have taken place on what’s shaping up to be an overcrowded November 2012 ballot.
Since Brown is likely to pursue his own initiative next year to raise taxes, he helped his own cause by eliminating another tax-seeking measure – the Amazon referendum.
Brown’s chances of passing a tax are better if there are no other taxes on the ballot.
The state also got promises from Amazon that include the creation of thousands of new jobs – 10,000, plus as many as 25,000 seasonal jobs. It’s wise to be skeptical about such promises, but they are better than nothing.
The delay in the deal probably is good policy as well. It gives Amazon and online retailers a year to work out legislation on on-line tax collection in Washington.
On an issue like this – involving on-line retailing that crosses state lines -- a good national policy would be ideal.
If such a policy doesn’t materialize, on-line retailers have to start collecting sales tax on purchases from Californians – giving the state the revenue it wants.
If only all the deals the legislature and governor negotiate were so good.