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Sep 09 2011

California State Senate Passes Amazon Internet Sales Tax Compromise Legislation

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And, the vote was NOT even close.
The state Senate approved a compromise bill Friday night that would lead to a temporary pause in California’s effort to force more online retailers to collect sales taxes.

Senators sent the measure to the Assembly for a final vote as one of the last major bills remaining in the final hours of this year’s regular legislative session.

The compromise between lawmakers, Amazon.com and traditional retailers would delay the expanded online tax collections until at least September 2012. That would give Amazon and other retailers time to lobby Congress for national rules governing online sales taxes.

AB155 would eliminate an estimated $200 million in tax revenue the state had been counting on this fiscal year while ending the threat of an expensive fight over an Amazon-sponsored 2012 ballot referendum to repeal the tax change.

“The retailers and Amazon now go back to Washington, D.C., together to lobby for national legislation to ensure that all Internet sellers collect the taxes. So this is good,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

He said the compromise provides the state with the certainty of future revenue, even if collections are delayed until next fall.

“We actually achieved peace with a delicate compromise here,” said Senate Minority Leader Bob Dutton, R-Rancho Cucamonga.

The Senate sent the bill to the Assembly on a bipartisan 36-1 vote.

Two Republican Senators, Tony Strickland and Ted Gaines were present in the chamber, but did not vote for the measure.

So, I will get my sales affiliate job back soon with Amazon.com.

The legislation when passed in the Assembly and signed by Governor Jerry Brown carries an urgency clause (passed by 2/3rds vote) and will take effect immediately.

The entire issue of internet sales taxes, now goes to the United States Congress and/or the federal courts. In the meantime, Amazon.com will more than likely create a physical nexus in California anyway (7/11 distribution) – but they bought themselves some time and lobbying clout.

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