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Amazon Boycott Urged; Site Reaches 20% of Worldwide Internet Users, Study Says

17 Aug, 2011 By: Chris Tribbey

A group of Californian nonprofits, along with a handful of state legislators, are asking Amazon.com customers to cancel their accounts and boycott the online retailer, until Amazon starts paying the same sales tax brick-and-mortar retailers pay.

Amazon is looking to put a referendum on the state ballot that would ask voters to overturn a state law that forces online retailers to collect sales tax, even if they have no physical presence in the state. Amazon cut ties with approximately 10,000 state affiliates June 29, after California passed the law as part of a budget package.

Amazon says the law will hurt job growth in the state and already has spent $3 million to get the signatures it needs to put it to a vote, according to state documents. However, the nonprofit groups, along with two state lawmakers say voters — and especially Amazon customers — need to reject Amazon’s pleas.

“It is unfortunate that Amazon — a multibillion dollar corporation — continues to argue for a tax loophole that gave them a unfair advantage against California’s small business owners,” said State Sen. Loni Hancock, D-Berkeley. “All we are asking is that they collect and remit their fair share of taxes, like everyone else.

“We intend to join with California businesses — large and small — to fight this tax evasion referendum tooth-and-nail.”

The nonprofit groups launched a website, ThinkBeforeYouClickCA.org, urging a boycott of Amazon, and offering a petition for visitors to sign, asking that Amazon pay its share of state sales taxes.

“Fight back by telling Amazon.com to play by the same rules all other California businesses do!” the group wrote in a statement. “If Amazon.com is unwilling to contribute to the well-being of our state, then we need to tell Amazon.com that we won’t contribute to their profits!”

The group and the state estimate that if the sales tax law is overturned, it could cost California an estimated $200 million a year.

“If Amazon.com is unwilling to abide by the same laws as everyone else and contribute to the collective well-being of our state, then I have no choice but to close my account and end my contributions to Amazon.com,” the petition reads.

The political committee collecting signatures for Amazon’s referendum, More Jobs Not Taxes, said in a statement that “More taxes won't solve the state budget crisis, they will only hurt California families and cost jobs.”

The nonprofit groups calling for an Amazon boycott have an uphill battle ahead of them: According to an Aug. 17 report from online tracking service comScore, one in five global Internet users, or 282 million people, visited Amazon.com and its related sites in June.

“While retail e-commerce has already grown to become a $150 billion-plus annual industry in the U.S., it still presents enormous upside opportunity across much of the globe,” said Gian Fulgoni, comScore co-founder and chairman. “Technology has changed the way consumers behave, and increasingly they are opting for the convenience and pricing advantages offered by the online channel.”

Meanwhile, Amazon is supported by legislation introduced at the federal level, the Main Street Fairness Act, which would ensure that online retailers collect the same sales taxes that brick-and-mortar retailers already do.

“Consumers shouldn’t have to face the burden of reporting all of their online purchases. Main Street retailers collect sales taxes on behalf of consumers; why shouldn’t online retailers do the same?” said Sen. Dick Durbin, D-Ill., who introduced the bill.

He estimates that states lose an estimated $24 billion a year in uncollected taxes on Internet sales.

“The Main Street Fairness Act doesn’t ask anyone to pay a single penny more in taxes. Instead, it would help governors and mayors collect taxes that are already owed,” Durbin said in a statement.

The bill would authorize the requirements of the Streamlined Sales and Use Tax Agreement, which would adopt interstate sales tax rules and give states the authority to collect sales tax from online retailers.

“Amazon.com has long supported a simple, nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location or level of remote sales,” Paul Misener, VP of global public policy for Amazon, said in a statement.

He applauded the introduction of Durbin’s bill, returning “the discussion of interstate collection of sales tax to Congress, which the Supreme Court says is the appropriate forum to resolve the issue.”

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