James Delahunty
10 Sep 2011 2:37
Internet giant agrees to start collecting sales taxes next year.
Amazon agreed to start collecting California sales taxes on September 15, 2011, unless the United States Congress passes legislation setting a national standard in a debate that has spread to numerous states.
While brick and mortar stores are subject to sales tax, Amazon does not collect the taxes, referring to a supreme court ruling in 1992 that declare the collection of taxes from companies that don't have stores or warehouses within a state unconstitutional.
Amazon had refused to collect sales taxes and gathered over 500,000 signatures of registered voters to put a motion to repeal a law that took effect on July 1 on the June ballot. "Nobody wanted this referendum," said Lenny Goldberg, a supporter who is executive director of the labor-oriented California Tax Reform Assn. "There's a big down-side risk for everyone with the referendum. Amazon gets hammered with bad publicity, and we could lose [the election]."
Increasing numbers of states have been probing the sales tax issue, as it could be a source of hundreds of million of dollars of tax revenue per year.