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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: California just can't help itself
By MobiusStrip on 7/12/2011 8:45:36 PM , Rating: 2
What about the small businesses that can't compete against online retailers because of the sales-tax disparity?

RE: California just can't help itself
By Solandri on 7/12/2011 10:35:46 PM , Rating: 2
They should complain to their State legislators to lower the State's sales tax rate. That is the only Constitutionally legal recourse available to States and brick and mortar businesses until/unless the Federal government decides to take a stand on sales tax in the States' favor.

Shifting away from consumption taxes (which are regressive) in favor of other more progressive taxes (like income tax) has been a favorite mantra of the left anyway. You should view this as an opportunity, not a problem.

By Reclaimer77 on 7/12/2011 10:48:26 PM , Rating: 2
My state does sales tax free weekends a few times a year. It's a great way to boost brick and mortar revenue.

But hey, why bother with positive growth ideas like that when you can just tax everything...

RE: California just can't help itself
By tng on 7/13/2011 9:37:19 AM , Rating: 2
What about the small businesses that can't compete against online retailers because of the sales-tax disparity?
The small businesses that are hurting in California are not hurting because of the differential in on-line versus local shopping and taxes, they are hurting because of CA laws and regulations.

Are you familiar with California Proposition 65? This was passed so that all businesses in the state that use chemicals or materials that could be considered cancer causing would post this at the entrance to the building, a warning so to speak.

Do you know that even sawdust causes cancer and all shops that do woodwork in the state have to have a warning? Just one of hundreds of things that CA has done to make it a hostile environment for small business.

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