To avoid ballot fight, State to agree to deal with the online giant

by Brian Leubitz

Amazon had put up over $5 million in a show of force for a potential referendum.  But, they never really wanted to go to the ballot.  And it looks like both parties avoid an expensive ballot fight with an agreement scheduled to be finalized before the end of session:

Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes.

The arrangement could lay the groundwork for a national online sales tax law. Amazon and major brick-and-mortar retailers like Wal-Mart and Barnes & Noble agreed to lobby Washington over the next 11 months for an Internet sales tax law that applies across 50 states. …

If no federal deal emerges by July 31, 2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012.

State lawmakers intend to pass a new bill in the next two days that would delay implementation of the online sales tax law until that date, according to Calderon and several sources. If Congress strikes a deal by July 31, 2012, online retailers would begin collecting taxes starting on Jan. 1, 2013, under whatever federal requirements are approved.(SacBee)

While the governor has previously said that he’s not really all that excited about a deal with Amazon, given that this was negotiated by the Senate leaders, it would seem hard to block.  

The bigger issue is how are we going to deal with the $200 million hole this blows in the budget.  And the fact that we basically only get a promise to lobby for a sales tax measure?  Well, that and a quarter might be able to get you a gumball.

But the reality is that Amazon wasn’t going to collect any sales tax anytime soon.  And were they to collect and submit the signatures, the law wouldn’t go into reality until approved (if approved).  So we are essentially dealing with a bunch of posturing.  Amazon knows that they are going to have to collect sales tax at some point and are hoping to delay it as long as possible. And oh, sure, it wouldn’t hurt to have one national standard.

With Amazon and the big retail giants on board, there is likely to be significant movement on the bill.  We’ll end up getting money into the system at some point by 2013, and we can stop messing with this fight.  Covering another $200 million, well, that won’t be so easy.