California Votes to Give Amazon a Sales-Tax Reprieve
SAN FRANCISCO — California lawmakers overwhelmingly approved a compromise bill Friday night giving amazon.com a one-year reprieve from having to collect a sales tax from its customers in the state.
Under the new measure, Amazon agreed to start collecting the tax in September 2012 unless there was federal legislation on the issue. Senator Richard J. Durbin, a Democrat from Illinois, has proposed a national law requiring e-commerce companies to collect sales tax, but it has not gained much traction.
Legislatures around the country, supported by struggling bricks-and-mortar stores, have been seizing on the sales tax issue as a means of raising much-needed funds. Amazon is fighting in the courts against a New York law compelling it to collect taxes, and has used the prospect of either opening or closing warehouses as a bargaining chip in negotiations with Texas and South Carolina.
The deal with California might embolden other states, said Robert W. Wood, a tax lawyer here. “Other states needing money will look and say, ‘It wasn’t a smooth process, but California is going to come out ahead,’ ” Mr. Wood said.
One of the main reasons to shop online is the fact that one can usually find items for less. It looks like the no sales tax advantage is soon going to fall victim to the poor economy. At least we have one more year of tax-free shopping here in California.