Santa Barbara Mission
Lengthy senate sessions M-F this week. Noon-5pm today then 10am start times thru Friday- which btw is the last day to amend bills on floor
Speaking of breakfast, legislators’ fundraisers are still in full swing, with breakfast events scheduled for Democrats Lois Wolk and Kevin deLeón and Republicans Jean Fuller and Joel Anderson. Evening events benefit Democrats Nancy Skinner, Charles Calderon and Assembly Speaker John A. Pérez.
On to today’s headlines:
Amazon.com is offering to build a number of distribution centers and hire more than 1,000 workers if California lawmakers back away — at least temporarily — from their efforts to force the Internet giant to collect sales taxes on purchases made by customers from the Golden State.
The proposal was made in the form of draft legislation at a meeting Tuesday night between Amazon lobbyists and representatives of companies that belong to the California Retailers Assn.
Backers of California’s effort to collect about $300 million a year in unpaid taxes on Internet sales dismissed the Amazon compromise as a ploy. “It’s a totally cynical maneuver that’s part of their game that they try to play in every state that keeps them from getting the sales tax,” said Lenny Goldberg, a legislative advocate for the California Tax Reform Assn.
According to an informal memo based on a description of the deal by an Amazon lobbying firm, Greenberg Taurig, Amazon wants the state Legislature to repeal a law that took effect on July 1. The statute requires Amazon and other out-of-state Internet sellers to collect California sales taxes.
Amazon, so far, has said it would not do so and is bankrolling a referendum campaign to repeal the law.
Amazon wants California to refrain from forcing it to collect the sales tax until at least January of 2014.
In return, Amazon would hold the signatures it’s already collected and drop its effort to repeal the sales tax collection law on the June 2012 ballot. Amazon also would build build two fulfillment centers, one in Northern California and one in Southern California, with approximately one million square feet of floor space and 1,000 employees.
Amazon further offered to send its customers annual statements listing their total purchases and advising them that they owe California use tax on the goods, the memo said.
The use tax, which is paid by the buyer, is the same basic rate of 7.25% for the sales tax.
The retailers association confirmed that the meeting took place and dismissed the proposal as “not serious.”
Retailers President Bill Dombrowski said the deal “will only prolong the harm to small businesses that employ Californians.”
“We’re looking at their proposal,” said Retailers President Bill Dombrowski.
For its part, Ned Wigglesworth, a spokesman for the Amazon referendum campaign, declined to discuss the matter.
In a move that could forestall a big ballot box showdown, Amazon.com has told traditional retailers it would agree to an online sales tax — but only if it’s delayed two years to give Congress time to pass a national law.
Under Amazon’s proposal, the company would go along with a sales tax for goods purchased online — as long as the tax is uniformly enforced across the country, according to sources involved in talks with the company. As part of the possible deal, Amazon is also offering to create 7,000 distribution center jobs in California and drop its push for an initiative to bar such a tax.
Amazon’s new position emerged from intense Capitol efforts to call a truce in a war that has seen California vote to impose the tax, Amazon respond by circulating petitions for a referendum to overturn the tax, and legislators taking steps to invalidate any such referendum.
“We’re trying to find a way to not have World War III,” said one brick-and-mortar retailer, whose group believes it’s unfair that Amazon doesn’t have to collect the tax. “There seems to be real interest in reaching an accord.”
A spokesman for Amazon declined to comment on the developments.
The political obstacles to a national agreement on online taxes are steep, and some Democratic leaders in California worried Wednesday that Amazon’s proposal for a two-year delay in California’s efforts to impose its own online sales tax is too much to pay for an uncertain outcome in Washington, D.C.
One leader of the group of traditional retailers said he was wary of Amazon’s offer.
“The so-called deal that Amazon has proposed is not serious,” Bill Dombrowski, president of the California Retailers Association, said in a statement. “Amazon is an out-of-state company with an unfair advantage over California businesses, and it is seeking a complete repeal of the law and another exemption from any further state action.
“Again and again, Amazon continues to demonstrate that they do not care about California businesses, taxpayers or communities,” Dombrowski said. “This deal will only prolong the harm to small businesses that employ Californians.”
It was not immediately clear how the Legislature would make up for the $200 million in revenues it is expecting to get from sales taxes Amazon was supposed to collect in the fiscal year that began July 1. Top Democrats such as state Senate President Pro Tem Darrell Steinberg, D-Sacramento, have said that the state desperately needs that revenue.
But Republican leader Bob Dutton, R-Rancho Cucamonga, said Steinberg was working with him to put together a bill that could gain bipartisan support.
“They had a very informative meeting,” Dutton said. “I wanted to encourage the individual retailers and their associations to get together with Amazon to work this out. It would be a win-win for them and people of California.”
Earlier this week, Senate caucus leader Bob Huff, R-Diamond Bar, said he doubted Republicans would sign on to the effort to stop Amazon’s referendum.
“My guess is the caucus will take a position against (AB 155) in favor of letting the political process work,” Huff said. “As much as there might be merit in policy and we want to protect brick-and-mortar stores, there’s a bigger play in motion now. This bill is an end run around the political process.”
Huff indicated he would be in favor of allowing Congress to settle the issue.
“The retailers have made some good arguments, but this is one that would be better addressed nationally, or in the context of some kind of tax reform that makes a more level playing field for everybody,” Huff said.
Republicans may be hesitant to agree to any deal. Grover Norquist, the father of anti-tax pledges that Republicans break at risk of political retribution, sent a letter earlier this week to Republicans telling them that a vote to thwart their referendum was as good as a vote for taxes.
A controversial push to give state regulators the power to reject proposed increases in health insurance rates has stalled in the state Senate.
Assembly Bill 52, by Assemblyman Mike Feuer, D-Los Angeles, would let the state insurance commissioner or the director of the Department of Managed Health Care reject or modify proposed rate increases found to be “excessive,” “inadequate” or “discriminatory.”
The bill cleared the Assembly on a party-line vote in June. But Feuer has decided to hold off on any action this year, saying he does not have the votes to win approval from the Senate before the first year of the legislative session ends next week.
“Despite an outpouring of strong support from small business, working families and consumers throughout CA, the bill has hit a temporary roadblock in the Senate,” Feuer said in a statement. “Right now, not enough senators are prepared to vote for any form of health insurance rate regulation.”
A Feuer spokeswoman said the Los Angeles Democrat will continue to work for the bill’s passage next year, when the Legislature returns for the second leg of its two-year session.
Barely three months after Senate Republicans denounced Goodwin Liu as a left-wing extremist and torpedoed his nomination to a federal appeals court, he was lauded as a brilliant and open-minded legal scholar Wednesday and confirmed to a seat on the California Supreme Court.
The Commission on Judicial Appointments voted 3-0 to endorse Gov. Jerry Brown’s nomination of the 40-year-old Liu to succeed retired Justice Carlos Moreno as the only Democratic appointee on the seven-member court.
Liu will be sworn in to office by Brown today and join the court in time for Tuesday’s critical hearing on Proposition 8, the 2008 initiative that outlawed same-sex marriage in California. The justices will consider whether California law allows the measure’s sponsors to represent the interests of the state and its voters in appealing a federal judge’s decision that Prop. 8 is unconstitutional.
Enjoy your morning!