Amazon Gets It's Way- For Now

Amazon is Able to Delay CA Sales Tax for One Year
California lawmakers approved a last-minute bill this past Friday that delays the state's "Amazon Tax," as it was unofficially dubbed, until September 2012. Amazon.com – chief opponent of the June 2011 California law that attempted to force online retailers to collect sales tax from state residents – has agreed to resume business with its California affiliates in exchange for the temporary moratorium.

Here are the highlights:

• After spending $5 million to gather signatures, Amazon has agreed to drop plans to fight the tax using California's referendum process.
• According to Paul Misener, vice president of global public policy for Amazon, "This bipartisan, win-win legislation will allow Amazon to bring thousands of jobs and hundreds of millions of investment dollars to California, and welcome back to work tens of thousands of California-based advertising affiliates,"
• Amazon now has until September 2012 to try and get Congress to make a judgement on the matter. If Amazon is successful in lobbying legislators to agree that online retailers need not pay sales tax– then California will defer to the federal action.
• If Amazon is unsuccessful at the federal level, California will start attempting to collect sales tax from Amazon, a process that's familiar to Amazon across a number of other states, including North Dakota, Kansas, and Kentucky. 

Interestingly, customers have been required to report a "Use Tax" for tax-free goods they purchase online, (although none ever do) so the entire issue is theoretically moot for an average Amazon shopper. As written in previos posts about this issue, there is an estimated $200 million in tax revenue that California should be earning from online shopping. California has already figured this revenue into its budget, thus collecting is a priority.