Amazon's stance on the collection of sales tax
on goods sold over the internet has been clear from day one: it's not going to
happen. But a new
law in the state of California may change Amazon's mind
real fast, or cause it to cut ties to the state.
In the recent past, we've seen the online retailer
cut ties with states like Texas, where Texas State Comptroller Susan Combs
charged Amazon $269 million in unpaid sales taxes, and Illinois, where Sen.
Dick Durbin (D-Ill.) introduced a bill called the Main Street Fairness Act,
which would force Amazon to collect sales tax.
Last month, Governor Jerry Brown signed a bill
that would require websites that forward shoppers to Amazon to collect sales
tax in California. The law is expected to generate $200 million in revenue, and
prompted Amazon to threaten to leave California-based affiliates.
Now, Amazon is asking California voters to repeal
the new law. The attorney general's office received a petition last Friday,
which will require 434,000 voter signatures to qualify for the ballot. The
attorney general's office will put together a title and summary for the
Amazon has said that it does
not have to collect sales tax because of a 1992 Supreme Court decision that excuses
Amazon and other remote sellers from having to collect taxes in U.S. states
that do not have the company's employees or warehouses operating within those
states. But between states looking for ways to offset large financial deficits
and brick-and-mortar stores like Best Buy complaining about Amazon being unfair
competition, Amazon is being pushed between a rock and a hard place.
Website operators are already feeling the effect
of the new law. Ken Rockwell, who operates a photography site called
www.kenrockwell.com in California, said online retailers have stopped
doing business with him because of the new law.
"I'm trying to figure out some other payment
scheme," said Rockwell. "That business model went away. I've got to
look for new business models."
Currently, Amazon only collects sales tax in Kansas,
Kentucky, New York, North Dakota and Washington.
quote: There's a mountain of legal precedence on Amazons side.
quote: Amazon had some third party companies that resided in CA that sell their products through Amazon. The state gov wanted Amazon to collect tax because those companies resided in CA.