Amazon Fights Back in Sales Tax Battle

Amazon is seeking a referendum for voters to decide whether to overturn a new law that forces online retailers to collect sales tax.

Tuesday, Jul 12, 2011  |  Updated 9:27 AM PDT
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Amazon Fights Back in Sales Tax Battle

AP

Amazon.com worker David Brendoff, left, moves boxes with merchandise for shipment.

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It's round two in the sales tax battle between California lawmakers and Amazon.com and this time the online retailer is taking its fight to the people.

Amazon is seeking a referendum for voters to decide whether to overturn a new law that forces online retailers to collect sales tax.

The petition, filed Friday with the state Attorney General's Office, comes after the requirement was included in a state budget signed in late June. It forces online retailers to collect California sales tax by expanding the definition of having a physical presence in the state.

The requirement now kicks in if Amazon has a marketing arm or affiliates in the state --individuals and companies that earn commissions by referring visitors to Amazon from their websites

Amazon had thousands of affiliates in California and cut ties with them after the law's passage.

Paul Misener, Amazon's vice president of public policy, says the referendum supports jobs and investment in California.

 

"This is a referendum on jobs and investment in California.  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.  At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away.  Amazon looks forward to working again with tens of thousands of small business affiliates in California that were harmed by the new law’s effect on hundreds of out-of-state retailers.  As Governor Brown has made clear, it is important to directly involve the citizens of California in key issues and we believe that Californians will want to vote to protect small business and keep jobs in the state."

Supporters of the current tax law say it puts Amazon on a fair playing field with other brick-and-mortar retailers and provides much needed revenue to the state.
 

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