It’s getting real in the Golden State.
Saying it won’t force California customers to pay sales tax on their Internet purchases, Amazon.com is severing ties with 10,000 small businesses and individuals here who funnel shoppers to the online bazaar through their websites.
The defiant action came hours after Gov. Jerry Brown signed legislation that would have required Amazon to start collecting a 7.25% base tax on online purchases Friday because it has affiliates here that are paid commissions for steering shoppers to its website. Previously, only Internet companies with stores or operations in California had to collect the tax.
“This legislation is counterproductive and will not cause our retail business to collect sales tax for the state,” said Paul Misener, Amazon’s vice president of global public policy.
He wouldn’t say whether the company would sue to overturn the law, as it has in New York, where its case is pending. But California officials said they expect Amazon to file suit.
“It’s a huge fight,” said Betty Yee, a member of the state Board of Equalization, the agency that collects sales tax. “We are the biggest customer marketplace for Amazon and other online retailers.”
You know where I stand on this, so I’ll spare you another rehashing of it. See here, here, and here for more on this.
I sure hope that the people of California can see what Amazon is trying to do here. To start, Amazon can safely be considered a “big box” company. I mean, with revenue in the billions, how could it not? With this in mind, this issue becomes less of an us vs. them issue and more of a way to help close tax loopholes not available to everyone.
I am all about competitive advantage and making Amazon pay sales taxes that the brick-and-mortar stores they compete with have to pay won’t take that away. Being an online store still has many advantages that something like this won’t be able to take away. All measures like these do are offer local stores a chance to better compete.
Thanks for your continued coverage. I think more people are really starting to see Amazon for the bully they are and will remember the way they punished their affiliates after the legislation was passed.
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