California Democrat Legislators will have to find a replacement for this year’s $ 200 Million they budgeted from the collection of these taxes, but next year they will get their hooks into California taxpayers.
In what looks like a sell out to Californians who will end up paying these taxes, Amazon.com has cut a deal to avoid a costly referendum election and federal litigation over the issue of tax nexus.
In a deal with state lawmakers and brick-and-mortar stores, Amazon tentatively agreed Wednesday to stop fighting a requirement that internet retailers collect sales tax on California purchases.
Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes.
The arrangement could lay the groundwork for a national online sales tax law. Amazon and major brick-and-mortar retailers like Wal-Mart and Barnes & Noble agreed to lobby Washington over the next 11 months for an internet sales tax law that applies across 50 states.
“Basically, Amazon will get a safe harbor to lobby Congress and the retailers will go hand-in-hand with them to adopt a law that will apply to all of the states,” said Assemblyman Charles Calderon, D-Whittier, who worked on the compromise.
If no federal deal emerges by July 31, 2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012. State lawmakers intend to pass a new bill in the next two days that would delay implementation of the online sales tax law until that date, according to Calderon and several sources.
If Congress strikes a deal by July 31, 2012, online retailers would begin collecting taxes starting on Jan. 1, 2013 under whatever federal requirements are approved.
Good luck with federal legislation to raise/collect taxes in the Congress in a Presidential election year. So, I am wondering if this is a stall game for Amazon.com and whether they have been planning to develop a tax nexus in California anyway.
I cannot see how this will “deal” will benefit Californians who will now seek out and buy from internet sites that do not collect sales taxes at point of sale. Of course, California taxpayers are supposed to pay “use tax” on those purchases, but who will police that?
As a business strategy, maybe Amazon.com has earned a monetary advantage over other retailers for a year or so. For Californians, it means more money out of their pockets to be delivered to the “money pit” of Sacramento politics.