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Amazon seeks ballot measure to repeal sales tax

By Josh Richman
Monday, July 11th, 2011 at 4:24 pm in ballot measures, California State Senate, Jerry Brown, Loni Hancock, state budget, taxes.

A lobbyist for online retail giant submitted to the Attorney General’s office Friday a draft of a proposed ballot measure that would roll back the online sales tax just passed by the Legislature and signed into law by Gov. Jerry Brown.

Amazon’s “California Jobs Referendum” will be reviewed and given a title and summary by the AG’s office before it’s cleared to start gathering petition signatures to be placed on the ballot.

Amazon Vice President of Public Policy Paul Misener issued this statement today:

“This is a referendum on jobs and investment in California. We support this referendum against the recent sales tax legislation because, with unemployment at well over 11 percent, Californians deserve a voice and a choice about jobs, investment and the state’s economic future. At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away. Amazon looks forward to working again with tens of thousands of small business affiliates in California that were harmed by the new law’s effect on hundreds of out-of-state retailers. As Governor Brown has made clear, it is important to directly involve the citizens of California in key issues and we believe that Californians will want to vote to protect small business and keep jobs in the state.”

As my Mercury News colleague Patrick May explained last month, federal law says states can tax sales only if the seller has a physical presence in the state. California sought to get past that issue by letting the state tax board collect from any retailer with a so-called business “nexus” or connection with an affiliate inside California. Supporters say it would make the tax code more fair, forcing Internet retailers to collect taxes just as brick-and-mortar stores already do. Several other states have enacted similar statutes.

UPDATE @ 4:30 P.M.: Board of Equalization member George Runner says “I told you so:”

“As I warned, Californians are losing jobs and income as a result of the so-called ‘Amazon Tax.’ It should come as no surprise that impacted California business owners would seek its repeal.

“Clearly, the ‘Amazon Tax’ is not working. After having terminated their relationships with thousands of California-based affiliate businesses, leading out-of-state online sellers continue to sell into California without collecting the sales tax.

“My staff has identified more than three dozen online sellers that have terminated their affiliate programs. Each termination represents lost jobs and lost income for California—losses that could have been easily avoided had the Governor and Legislature exercised a little common sense.

“Proponents of the ‘Amazon Tax’ claimed it would ‘create fairness’ by ‘leveling the playing field’ between California’s brick and mortar retailers and out-of-state online sellers. They claimed it would generate $200 million in new revenues for the state this year. But they were wrong.”

UPDATE @ 4:54 P.M.: State Sen. Loni Hancock, D-Berkeley, who sponsored some one of the bills that led to the online sales tax, says, “It is unfortunate that Amazon – a multi-billion dollar corporation – continues to argue for a tax loophole that gave them a unfair advantage against California’s small business owners. All we are asking is that they collect and remit their fair share of taxes, like everyone else.”

UPDATE @ 5:24 P.M.: Board of Equalization member Betty Yee doesn’t see eye-to-eye with her colleague George Runner. “It is in every Californian’s interest for online and store front businesses to play by the same rules,” Yee said in a news release. “I strongly doubt Californians will support a loophole promoting out-of-state jobs, when holding accountable to the same rules as everyone else protects California’s economy.”

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  • Doug

    OOOoooooh, Betty. You’re in for a doozie of a shock if you believe that.

  • Elwood

    Both Ms. Hancock and Ms. Lee represent the Peoples Republic of Berkeley.

    With their large entitlement constituencies, their positions are hardly surprising.

  • RR, senile columnist

    Elwood is right. Half of Alameda county can’t read; th rest can ‘t think.