STATE OF LIMBO
Amazon Near Deal on California Sales Tax
Amazon has countered California’s passage of the so-called Amazon tax by terminating its in-state affiliates and doing an end-run around Sacramento by seeking to qualify a proposition to repeal the new law for the November ballot.
Sacramento responded by seeking to repeal and reenact the measure but as an “emergency bill” that cannot be amended by referendum (and which would up the revenue threshold for collection to $1MM). This proposal, however, came up five-votes shy of the 2/3rds approval required.
Amazon has returned serve by offering to open two warehouses in California with approximately 7,000 jobs in exchange for a two year cease fire on the sales tax issue, but this was dismissed by Amazon Tax advocates.
Last night Amazon reached a deal with legislative leaders to delay the tax for a year to give Amazon a chance to win passage of a national sales tax measure in Congress while dropping the proposed ballot measure, but it is unclear whether the deal has Governor Brown’s blessing. As far as the impact for terminated Amazon affiliates, the e-commerce giant indicated that they would welcome California affiliates once the law is repealed.
More Info: Amazon Proposition; Nick Eaton, Amazon Sales Tax Showdown May Dissolve Soon,Seattle Post Intelligencer; Michael Santo, Amazon.com, State of California reach tentative deal on sales tax holiday, Examiner.com