Amazon.com supports a referendum effort to repeal California’s “Amazon Tax.”
Online retailer Amazon.com has been very careful over the years to avoid having a physical presence (the current bar set by the Supreme Court of the United States) in states which tax online or catalog sales. They have done so both to increase their market share, and to make shopping on Amazon more economical for their customers.
The brick and mortar retailers (including most of the largest retailers in the country) have been working assiduously to remove this competitive advantage on Amazon’s part, while states desperate for additional tax funds have succumbed to the siren call of the Amazon Tax. They have mostly done so by defining a business partnership with Amazon (though other retailers such as Overstock.com have been effected), such as Amazon’s Affiliates Program (I am, shortly will have formerly been, a California Affiliate of Amazon) a physical presence. Amazon has already notified all of it’s California Affiliates that their contracts will be cancelled shortly before the law goes into effect. By doing so Amazon will be able to retain it’s competitive advantage with consumers in California.
As unintended consequences go, both the cancellation of California Affiliates (and the movement of those who can out of state) and a referendum challenge to the new law can qualify as unforeseen only to the willfully blind.
By Barney Jopson | FT online
Amazon, the world’s biggest online retailer, has put its backing behind a drive for a California referendum on the state’s move to tax online shopping.
The online retailer, which is based in Washington state, said on Monday that it would support a referendum on California’s move to require Amazon and other online retailers to collect sales tax from customers in the state.
The tax measure was included in the state budget passed last month as California struggles to reduce a $9.6bn deficit. Most US online shoppers do not pay sales tax because the US does not have a federal tax law on e-commerce, but California is the eighth state to introduce a local tax.
It did so with the support of bricks-and-mortar retailers including Walmart, Home Depot and Best Buy, which complain that a tax loophole has given online retailers an unfair price advantage.
Amazon said that it was supporting a referendum petition filed last week by a consultant who works for the company and lives in California.
Since my wallet, both as an Affiliate and as a consumer is impacted, I plan on finding a signature collector for this referendum ASAP.