Amazon.com and California legislators have reached a compromise on sales tax collection in the state. As part of the deal, Amazon will not have to collect sales tax until September 2012. In the meantime, the Seattle company said it would work towards federal legislation to institute a new federal sales tax collection system for online retailer.
Paul Misener, Amazon vice president, global public policy, said in a statement:
“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. This legislation also will allow us to continue to work with Congress and the states to obtain a federal resolution to the sales tax issue as soon as possible.”
The new legislation – passed 59-8 — now goes to Governor Jerry Brown for his signature.
Amazon was pushing towards a referendum in the state to wipe out the old legislation, which would have forced the Seattle online retailer to collect sales tax on purchases made in the state. The company — which pulled the plug on affiliates in the state after Gov. Brown passed the initial bill — had committed more than $5 million towards the referendum.
California lawmakers said they were happy to avoid a referendum.
“It does save a very, very expensive and very divisive referendum campaign, pitting Amazon versus Wal-Mart, pitting brick and mortar versus online,” Assemblyman Chris Norby told the AP. “They’d be trashing each other.”
Amazon has taken plenty of knocks in recent weeks over its hard stance in California. In an editorial this week, The New York Times called Amazon’s position “an abdication of corporate responsibility.”