Will Amazon & California Declare a Truce in Tax War?

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It is being widely reported that Amazon and the state legislature have declared truce in the ongoing effort to get Amazon to collect sales taxes. In the deal that passed the legislature last Friday, Amazon and other online retailers get to delay collecting sales taxes until September 2012 so that they may try to lobby for a federal solution to the tax issue. In exchange, Amazon is going to drop its proposed initiative to block the law.

Amazon had earlier offered to create 7,000 jobs in California by building multiple distribution centers in California. Amazon still wants to do that and asked for safe harbor if they go ahead, but the legislature didn’t accept that. They say that the opportunity to create jobs will have to wait until January.

It’s too bad that the only real sense of urgency in Sacramento is to collect more taxes and not to create more jobs. They are giving Amazon the tax break anyway, so creating 7,000 jobs would be costless to the state. But the people in Sacramento just don’t seem to care enough to deal with that now and prefer to wait four or five more months. I guess they think four or five months of 7,000 people being unemployed isn’t worth their time.

As I write this, it is unclear what Gov. Brown will do – will he sign it, veto it or just let it go into law without his signature.

Whether Amazon will reinstate its affiliate program in California is also still up in the air, but it would be nice to see the 25,000 affiliates back in business creating jobs and paying taxes. We can only wait and see.

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