Amazon Gets OK to Pursue Sales Tax Referendum

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News Posted: Tue, Jul 19 2011 2:40 PM
California voters prepare: Inc. has announced that the California Attorney General's Office has approved its petition for a referendum that will let voters decide whether or not to overturn a new law that forces online retailers to collect sales taxes in the state.

There has been a large amount of criticism pointed towards Amazon as of late for simply abandoning their affiliates and branches located in California in the face of this law. The law forces online retailers, like Amazon, to collect California sales taxes by expanding what it means to have a physical presence in the state. This includes cases where an online retailer has a related company, such as a marketing arm or an affiliate, within the state. Amazon's planning strategy has focused much attention on avoiding states where sales taxes would be collected, so when the law passed Amazon wanted to get out of dodge.

The law is projected to help California collect an additional $200 million annually. On the other side of the coin, Amazon says that the referendum aims to support jobs and investment in the state. In order for Amazon to bring its measure before voters in the next statewide vote in February, the company must gather over 500,000 signatures by late September.
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I am sure they will win this as well. 500,000 sigs is nothing for a site like Amazon to collect.

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They're getting my vote.

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RTietjens replied on Tue, Jul 19 2011 5:20 PM

How much income did California residents lose by forcing Amazon to end affiliate programs in their State? Want to bet it was more than $200 million/year? Let's do the math: The State sales tax is 7.25% as near as I can tell, so that means the State government is expecting Amazon sales to top $2.7 billion annually. The *minimum* payout for an affiliate is 4%, so that means Californian affiliates could have expected at least $110 million in payouts from Amazo, all of which is taxable as income. The median income in CA during 2009 puts people into the 10% income tax bracket. This means the State government threw away an assured $11 million in income tax for a pie-in-the-sky possible $200 million that THEY KNEW IN ADVANCE WAS NOT GOING TO BE COLLECTED.

I would call that extreme malfeasance of office, and if I were a California resident, I would be screaming for a recall vote for every single one of corrupt fools who voted "yes" on the extension of State sales tax to online sales from Amazon.

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JDesmond replied on Tue, Jul 19 2011 6:48 PM

Try 9.75% in Los Angeles. So if you want to buy that MacBook Pro, a $2,000 one will be $2,200 plus another California fleecing in the "LCD recycle fee", depending on what size monitor or TV you buy. $16 on top of that ~10% sales tax for a 17" incher.

Where do I sign?

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realneil replied on Tue, Jul 19 2011 8:20 PM

You don't have to be smart to be a politician. You just have to convince people to vote for you.

Dogs are great judges of character, and if your dog doesn't like somebody being around, you shouldn't trust them.

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Inspector replied on Tue, Jul 19 2011 9:50 PM

Im thinking amazon will get those signatures the first day if not min they ask for it :). I don't really like using amazon for shopping, not sure y i just like to go to sites that sell one type of item i want, tech on a tech site, books on a book site ect...

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AKwyn replied on Wed, Jul 20 2011 6:55 AM

Amazon makes one hell of a point here, and I don't need to restate what has already been said to know that it's just a bad idea of what California is considering. I admit, California is in a bad state of mind right now but instead of doing any sort of major restructuring, they're just cutting deep and raising the state taxes in a last ditch attempt to get money. The latest law stating that California should collect sales tax from shops out of state is just wrong, and they're expecting they'll get loads from Amazon with this law, they should of thought again.

Let me just say that I'll be one of the few who leaves his signature on the piece of paper; as for the other things, guess I'll have to get used to paying a whole lot more then what I'm used to...


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