Amazon.com cut a tentative deal with legislative leaders Wednesday night that would allow it to postpone collecting sales taxes from Californians for another year.
The company in turn would drop its battle to overturn the state’s new law that required it and many other out-of-state online retailers to collect the taxes.
Under the deal, Amazon would delay collecting taxes until September 2012, Assemblyman Charles Calderon (D-Whittier) said. The new law had mandated that Internet retailers start collecting state taxes in July if they had offices, workers or other connections in California.
Amazon had refused to collect the taxes and poured $5 million into collecting signatures for a ballot referendum challenging the law.
If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon’s deal with California.
“It’s a safe harbor for up to a year,” Calderon said of the agreement he helped strike. “If they can’t get Congress to act by next July, then they will start to collect the tax in September 2012. If by chance they get Congress to act, then that would trump the state law.”
See here and here for some background. I think the odds of this Congress taking any action are pretty small, but you never know. You know that I believe this will ultimately require a federal fix, I just want it to be a non-radicalized Congress that does it. Be that as it may, I consider this a step in the right direction. I wonder if it will have any effect on the battle between Amazon and Texas over sales tax collections. (Side note: Comptroller Susan Combs says Rick Perry was “uninformed” about the Amazon issue in Texas. Awesome!) Kevin Drum has more.