Amazon and California Legislators Strike a Deal

Yesterday, and key California legislative leaders of both parties struck a deal. Assuming this deal passes the state legislature and is signed by Governor Brown, will begin collecting sales tax in California on September 12, 2012. However, if Congress were to pass a national law dealing with Internet retailers, that law would supersede this legislation.

Amazon has been trying to get a referendum qualified on the California ballot. That measure would put the new “Amazon Tax” up to a vote of the people (probably on the March/June presidential primary); if the referendum were to pass, the Amazon Tax would be a thing of the past.

From Amazon’s view, this measure gives them a year to operate without any legal worries, and a year to lobby Congress to pass a national measure. (Given that next year is a presidential election year, I’m not hopeful of anything substantive passing Congress.) For key Democrats, this deal gives the likely certainty of future revenues versus the strong possibility of the Amazon Tax heading into history via a probable referendum.

That said, Governor Brown has not stated his position on the measure. Should he veto the measure, it’s likely the referendum would move forward.


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