Amazon, Online Retailers Win California Tax Reprieve

23 Sep, 2011 By: Chris Tribbey

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California Gov. Jerry Brown gave Amazon.com and other online retailers a temporary reprieve Sept. 23 when he signed a law that delays the collection of online sales tax to September 2012.

Brown had approved legislation in June as part of the state’s budget that would have required out-of-state retailers like Amazon to collect sales tax. The delay allows for more time for a national online sales tax solution, he said.

In return, Amazon has agreed to drop a ballot referendum that would have asked voters to overturn the law.

“A prolonged, costly ballot battle is a benefit to no one,” Brown said. “This landmark legislation not only levels the playing field between online retailers and California’s brick-and-mortar businesses, it will also create tens of thousands of jobs and inject hundreds of millions of dollars back into critical services like education and public safety in future years. It’s time for Washington to follow our lead and forge a bipartisan national solution.”

In exchange for the extra time, Amazon pledged to create a minimum of 10,000 full-time jobs and hire 25,000 seasonal workers in the state by the end of 2015.

The following is Amazon’s statement on Governor Brown’s signing of AB 155, which should be attributed to Paul Misener, Amazon vice president, global public policy:

“We’re grateful to Gov. Brown and the legislature’s bipartisan leadership for this win-win law,” said Paul Misener, Amazon VP of global public policy. “We’re committed to working with Congress, retailers and the states to pass federal legislation as soon as possible and as analysts have noted, we’ll continue to offer customers the best prices, regardless of whether sales tax is charged.”

The state Board of Equalization estimates that California loses more than $1 billion each year from uncollected use taxes, with at least $83 million of that attributed to Amazon’s sales in California.

“This is a major victory for brick-and-mortar businesses in this state,” said California Retailers Association president and CEO Bill Dombrowski. “Amazon's concession to finally begin collecting sales tax in California is a groundbreaking moment that sends a strong message to Washington that it is time to stop giving special treatment to a select few. All retailers deserve the chance to compete, grow and create jobs on a level playing field, without government picking winners and losers.”

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