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Senate President Pro Tem Darrell Steinberg is even going as far as gaining support for a bill that prevents Amazon from bringing a referendum to unravel the present sales tax law  (Source: uncoverage.net)

Amazon CEO Jeff Bezos
If state leaders can put a hold on the new law until 2014, Amazon will drop its effort to repeal it and would hire 7,000 new employees in California

Amazon has been fighting a tax-related battle for quite some time now. In the past, state's like Texas, Illinois and Colorado have pressured the online retailer to collect taxes in order to make up for state budget shortfalls, but Amazon refused and would simply pack its bags to move on to another state.

California recently joined the list of states who've pressured Amazon to collect. In fact, Governor Jerry Brown signed a bill in June that would require websites that forward shoppers to Amazon to collect sales tax in California. The law, which took effect July 1 and is expected to generate $200 million in revenue, angered Amazon to the point that it asked California voters to repeal the law.

Now, Amazon has a new proposition for the state of California that was discussed in a meeting Tuesday with leaders of the California Retailers Association and those in the office state Senate Republican Bob Dutton in Sacramento: If state leaders can put a hold on the new law until 2014, Amazon will drop its effort to repeal it and would hire 7,000 new employees in California.

While the hiring spree could be an appealing option for the state, since California's unemployment rate was at 12 percent in July and is expected to remain in the double-digits through 2012, Democrats are rejecting Amazon's proposal due to budget-related woes.

Earlier this year, state leaders needed to close a $10 billion shortfall. This gap was closed in June after deep spending cuts in previous budget cycles, but Democrats are backing the new law due to the fact that it has the support of local governments, public employees and small and large businesses.

Brick-and-mortar businesses like Best Buy and Walmart have been complaining about "unfair competition" with Amazon since they have to collect taxes and Amazon doesn't. The California Retailers Association quickly rejected Amazon's proposal.

"Our people came back and said this isn't legitimate," said Bill Dombrowski, president of the California Retailers Association. "It's unacceptable."

As for local governments and public employees, their "ranks are being thinned" due to a weak local revenue and overall state.

Senate President Pro Tem Darrell Steinberg is even going as far as gaining support for a bill that prevents Amazon from bringing a referendum to unravel the present sales tax law. Amazon spokespeople said they believe they'll have enough voter signatures by September 27 to qualify its referendum for next year's ballot.

In addition, Steinberg and other Democrats will create California jobs without the help of Amazon by proposing tax breaks for businesses, creating an economic development office and easing regulation.


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RE: Extortion?
By Spuke on 9/2/2011 12:11:19 PM , Rating: 5
quote:
This comes off as extortion to me.
But the continued spending into oblivion by the state governments is ok? And with the 5.4 businesses per week leaving California so far this year up from 1 business per week in 2009, the state NEEDS to do something about its unfriendliness to businesses. I think Amazon is being nice here, if it was me, I would've given them the middle finger and stayed away. No legal action or anything.


RE: Extortion?
By YashBudini on 9/2/2011 12:25:09 PM , Rating: 2
quote:
the state NEEDS to do something about its unfriendliness to businesses.


Is the change the result of the business climate or the economic climate in general? All businesses have some ongoing constant expenditures. Are they moving out of state or simply closing up shop to cut their loses? Like many businesses do during bad times all over the world?

There's a reason when people enter a witness stand that they swear to tell the truth and the whole truth an nothing but the truth. It's because half a truth is often as bad as a lie, sometimes worse. I don't mean you in particular, I mean in general.


RE: Extortion?
By Spuke on 9/2/2011 2:08:53 PM , Rating: 3
quote:
Is the change the result of the business climate or the economic climate in general?
This has been something that's been going on for quite a few years. It's really the business climate. Even when things were "good", business was leaving anyways. Same thing with residents, in the last 10 years, 2.2 million more tax payers left the state than entered.

I would like to see the trends in the next 5 years. There is a lot of fear in business currently with the proposed Final Solutions Act that will regulate CO2 emissions in the state. If that gets passed (on hold for now), 1 million people will be out of a job and that's according to the state government's study. Who knows what the real number will be.


RE: Extortion?
By YashBudini on 9/2/2011 4:10:55 PM , Rating: 2
Leaving or folding? And yes companies move about in good economic times. Again, without national data how do you put CA's data into context?

Do you have stats about how many businesses fold after 1 year? Around here in good economic times the rate was about 50%.

quote:
, in the last 10 years, 2.2 million more tax payers left the state than entered.

Yes, but what percentage of that is the result of this?
http://www.epi.org/economic_snapshots/entry/corpor...

IBM had record profits last year and let go of 5000 people. Do they have any choice than to move to a lower cost area?

http://www.thefreedictionary.com/duress
Not a choice.


RE: Extortion?
By YashBudini on 9/2/2011 10:54:16 PM , Rating: 2
Nobody is posting anything other than opinions. I posted some links to actual info and got rated down.

You have a lot to be proud of here Jason.


RE: Extortion?
By EricMartello on 9/2/2011 11:12:15 PM , Rating: 2
Welcome to DT, where facts are frowned upon and hearsay rules. If you want high ratings try making references to idiotic, overused memes.


RE: Extortion?
By YashBudini on 9/2/2011 11:26:58 PM , Rating: 3
If you post you can't rate. It should really be the other way around. If you can't contribute you shouldn't have the right to rate.

There's also the misconception that the person who yells the loudest and puts the L on their forehead wins the argument. I wonder where such techniques were learned from? OK, not really, we all know where they came from.


RE: Extortion?
By Spuke on 9/2/2011 11:31:10 PM , Rating: 2
quote:
Leaving or folding? And yes companies move about in good economic times. Again, without national data how do you put CA's data into context?
The numbers are just businesses leaving the state. The context of the data is that in 2009 there was 1 business per week leaving the state, now in the first ~8 months of this year, there are now 5+ businesses leaving the state.


RE: Extortion?
By Samus on 9/2/2011 3:36:57 PM , Rating: 1
What I find amazing is corporations get so fed up with California they actually relocate to substantially more expensive places to operate a business, such as Oregon and Washington. Oregon alone has a 10% (or something ridiculous) state income tax. But, no sales tax, so depending on your industry, that can help you.


RE: Extortion?
By ClownPuncher on 9/2/2011 5:58:18 PM , Rating: 2
No income tax and no corporate tax in WA. Some of the largest and most profitable companies in the world locate themselves here for those reasons, and having one of the more active ports in the country doesn't hurt either.


RE: Extortion?
By YashBudini on 9/2/2011 6:51:44 PM , Rating: 2
So where do revenues come from? New Hampshire has no sales tax, but oppressive real estate taxes, which explains the over population of trailer homes as opposed to permanent homes.


RE: Extortion?
By Solandri on 9/2/2011 6:59:14 PM , Rating: 2
Washington has a high sales tax (nearly as high as California's), and moderately high property taxes. It's also not exactly true that there's no corporate income tax. Washington uses a corporate business and occupation tax. Depending on your industry, you must hand over a certain percentage of your gross revenue to the state (around 1% for most businesses). I suspect they did this in response to Boeing and Microsoft shifting profits to out-of-state and overseas entities so they could claim they made no profit, and hence owed no corporate income tax.


RE: Extortion?
By ClownPuncher on 9/2/2011 7:09:20 PM , Rating: 2
Yep, that is fairly accurate.


RE: Extortion?
By YashBudini on 9/2/2011 7:26:06 PM , Rating: 2
quote:
you must hand over a certain percentage of your gross revenue to the state (around 1% for most businesses)

Talk about simplifying the tax code.


RE: Extortion?
By dark matter on 9/4/11, Rating: 0
RE: Extortion?
By ClownPuncher on 9/2/2011 6:59:58 PM , Rating: 2
Sales tax, business and excise tax, state controlled liquor board etc. We also export a lot of goods.

For such a liberal state, the tax codes are a bit regressive. It obviously isn't perfect, but hopefully a bit more business friendly.


RE: Extortion?
By YashBudini on 9/2/2011 7:28:07 PM , Rating: 2
quote:
For such a liberal state, the tax codes are a bit regressive. It obviously isn't perfect, but hopefully a bit more business friendly.

Compromise all too often is as good as it gets. Extremist views in either direction are usually a much larger fail.


RE: Extortion?
By ipay on 9/2/2011 4:35:19 PM , Rating: 3
quote:
And with the 5.4 businesses per week leaving California so far this year up from 1 business per week in 2009, the state NEEDS to do something about its unfriendliness to businesses.

Isn't that what this is doing? There's a reason local retailers are backing this - because it makes their local stores (that are employing Californian's) more price competitive with the online companies who are mostly employing people in other states. And the article goes on to mention that they are planning on implementing tax breaks for local businesses. This is pretty clearly a move to 1 - increase revenue, and 2 - help local business while discouraging them from moving out of state and to an online model.
quote:
I think Amazon is being nice here, if it was me, I would've given them the middle finger and stayed away.

Amazon can't just stop selling stuff in California. If you think that's their best option you have no concept of business realities. Or did you just mean they should ignore California when they send the bill? That's an option, but California would certainly sue in that case, at which point it would be impossible to just ignore.


RE: Extortion?
By borismkv on 9/2/2011 5:18:31 PM , Rating: 2
Amazon doesn't *have* to stop selling things in California. State governments do not have the authority to force online retailers to collect taxes if they don't have a physical presence in their state, based on a supreme court ruling. Basically, because Amazon has partners with offices in the state of California, this law would force them to collect sales taxes on sales made to the state of California, period. What Amazon *can* do is shut down relationships with any partners in the state of California. For some of those partners, that's a big chunk of their income. Doing so could cause a great deal of loss for the state of California in both jobs and tax income.

Amazon has none of its physical operations located in California. They're basically saying, "Put the law on hold and we'll start operating directly in California."

Living in Arizona, I already have to pay sales taxes on Amazon purchases since they have a Warehouse near Phoenix. I do, however, get everything from there within 2 days no matter what shipping method I pick.


RE: Extortion?
By ipay on 9/2/2011 5:43:51 PM , Rating: 2
That's a matter for the lawyers to hammer out, and I won't pretend to have enough knowledge about it. However, i was under the impression that this was a bit of a grey area, and that California would likely sue over it anyway, with the final court decision unknown.

It's fairly common practice for businesses to settle patent cases out of court even when they know they would have won, simply because it's cheaper to pay the other way to go away than it is to pay your lawyers to go through a long court battle. The same may be true here.


RE: Extortion?
By dark matter on 9/4/2011 1:12:21 PM , Rating: 2
Dude, if you don't know, why are you arguing with someone who obviously does.


RE: Extortion?
By Spuke on 9/2/2011 11:36:31 PM , Rating: 2
quote:
Isn't that what this is doing? There's a reason local retailers are backing this - because it makes their local stores (that are employing Californian's) more price competitive with the online companies who are mostly employing people in other states.
Tell that to the 10,000 businesses that lost out when Amazon cut their contracts with them that they aren't employing Californians. Also, web presence doesn't mean there is no physical presence. Where do you think merchandise is kept? In fairyland with the unicorns?


RE: Extortion?
By Reclaimer77 on 9/3/2011 12:54:44 AM , Rating: 2
This isn't about being "fair" to local business, it's about making the state more money. If they wanted to be "fair", they would cut local state taxes to boost revenue and consumerism, NOT try to hammer their own taxpayers and force them to pay taxes on Internet sales.

How does taxing one sales medium make it more "fair" for the other? Think about it. Are brick and mortar stores going to benefit from Amazon sales taxes? They sure as hell aren't going to be seeing any of that money.


RE: Extortion?
By eskimospy on 9/3/2011 3:38:00 PM , Rating: 2
Haha. 'If they wanted to be 'fair' they would conform to my ideology!'

Fairness has to do with a level playing field for all participants, it has nothing to do with whether you are raising or lowering taxes to do it.

Current tax structure incentivizes consumers to shop online for no good reason. That should end, and anyone looking at this situation rationally knows it isn't going to end through the abolition of sales tax. Considering that sales taxes are a consumption based tax, I would think that conservatives would be a big fan of revenue generation in this way. Not only are we removing a market distortion, but we're regressively taxing to do it!

Oh wait, it's something Democrats support and they aren't on your political sports team.


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