Amazon.com’s internet sales will be forced to collect California sales taxes this fall under compromise legislation passed last year.
But, now Amazon will be constructing fulfillment centers in California and making deals with local governments to win up to 80% of the sales tax back.
Amazon.com Inc.for years has fought government efforts to tax e-commerce. Now it’s poised to pocket millions of dollars in sales taxes paid by California customers.
As part of a pact reached last year with state lawmakers, some online retailers agreed to begin collecting sales taxes this fall. About half of the projected $316 million raised in the first full year is expected to come from merchandise sold by Amazon, which is also setting up two California fulfillment centers that will employ at least 1,000 workers each.
San Bernardino and Patterson, where the centers will be located, will gain not only jobs but also a tax bonanza: Sales to Amazon customers throughout California will be deemed to take place there, so all the sales tax earmarked for local government operations will go to those two cities. It’s a windfall so lucrative — about $8 million a year initially for each city — that local officials are preparing to give Amazon the lion’s share of their take as a reward for setting up shop there.
Talks with Amazon about a so-called sales-tax rebate are still in the early stages. But in Patterson, a struggling Central California community of 21,000, Mayor Luis I. Molina said he’s ready to do what it takes to help his city.
As I said before, the only ones who will lose on taxing the internet are the California consumers themselves.
Now, some of the tax money, which was supposed to achieve “fairness” for the brick and mortar stores will be going back to Amazon.com anyway.
Only the Democrats in the California Legislature and lame-brained California Governor Jerry Brown could craft such a crappy deal for California consumers and taxpayers.