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The attorney general's office received a petition last Friday, which will require 434,000 voter signatures to qualify for the ballot

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 petition. 

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 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.

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RE: Tax Free Solution
By inperfectdarkness on 7/12/2011 5:22:41 PM , Rating: 2
i see that as a problem. i much favor sales tax, as opposed to income tax. if you want to encourage a population to save (instead of live irresponsibily paycheck to paycheck) a sales tax is a great way to encourage that. you only pay taxes when you buy stuff. everything you don't spend is 100% yours.

now i'm not a huge fan of paying tax on online purchases, but it does make sense--assuming that the state in question does NOT have an income tax. if florida (for instance) wanted amazon to charge tax payable to florida--that makes sense to me.

it's the "double-tax" of income tax + sales tax that doesn't make sense to me. kill off all income tax; establish a national sales tax; then we can talk about levying unilateral taxes on online sales.

RE: Tax Free Solution
By Reclaimer77 on 7/12/2011 5:27:00 PM , Rating: 1
They would never do that though because used goods, which sales are impossible to track and tax, would become a massive boom market. They would also use the "black market" as a reason why they wouldn't want to make that change.

Hell if the only tax I had to pay was a sales tax, I would do everything in my power to fly under the radar and buy as little taxable goods as possible. And so would everyone else, if they were smart.

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