Amazon Offers Calif. 7K Jobs to Put Sales Tax Law on Hold; Dems, Retailers Refuse
September 2, 2011 9:48 AM
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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
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
, 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.
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.
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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Forgot something... our constitution..
9/3/2011 7:27:32 PM
No matter what side of the debate you stand on, it can't be denied that no state can tax any interstate commerce without a federal statute authorizing it. As our constitution states:
Article 1, Section 8:
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;. . .To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"
And the 10th amendment:
"The powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
I always chuckle every year when I come to the line in our state income tax form that demands you pay uncollected sales tax for any goods you purchased out of state or off the internet.. Go ahead, Ohio -- sue me!
No state tax on Amazon will ever fly until a federal act such as Dick Durbin's Main Street Protection Act gets ratified; which will only end up in the states bickering and arguing for their fair share (who has the right to collect -- the state which the product is sold from, the state which a product is shipped from, or the state where it arrives?). Meanwhile, it could be entirely worth it for Amazon to move all of it's operations to states with no sales tax, giving Cali the finger in the process.
"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad
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