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California senate passes Amazon sales tax deal legislation

Written by James Delahunty (Google+) @ 10 Sep 2011 2:37

California senate passes Amazon sales tax deal legislation 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.

Tags: Amazon
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