Amazon Reaches Tentative Accord on Sales Taxes With California Lawmakers

[aGameOfThrones]

Amazon.com Inc. (AMZN) would drop a quest to exempt itself from collecting sales taxes in California and the state stands to forfeit about $200 million under an agreement that lawmakers may approve as early as today.

Seattle-based Amazon, the largest online retailer, agreed to abandon its planned 2012 referendum on Internet-sales taxes in exchange for a one-year break in levying the tax on purchases by California residents, state Senator Loni Hancock said.

The deal would cost California about $200 million in lost tax revenue over the next year, based on Board of Equalization estimates. It also may slice Amazon’s sales by about 5 percent next year as consumers pare back purchases to avoid paying the higher tax, said Kerry Rice, an analyst at Needham & Co.

“It’s a classic compromise,” Hancock said from her office in Sacramento. “Amazon recognizes its obligation to collect and remit sales taxes in California.”

The loss of expected tax revenue from Amazon sales may increase the likelihood of cuts to public education, universities and social programs next year. In August, the state Finance Department said revenues missed the projections in the 2011-12 budget by $541 million.


http://www.bloomberg.com/news/2011-09-08/amazon-reaches-tentative-ca-taxes-accord.html

[gls]

Weak...they should stick to their guns. This will just open the floodgates.

[Kludge]

Weak...they should stick to their guns. This will just open the floodgates.
No kidding. There're quite a few states Amazon is locked in battle with over sales tax. Amazon just agreed to collect sales tax in pretty much every state, now that states know Amazon will concede. They came out really strong by cutting off associates in states demanding sales tax collection. I guess the losses must be too great to continue disallowing associates from those states, but this is a dramatic failed strike nonetheless.

[HOLLYWOOD]

The loss of expected tax revenue from Amazon sales may increase the likelihood of cuts to public education, universities and social programs next year. In August, the state Finance Department said revenues missed the projections in the 2011-12 budget by $541 million.Government/Politicians... always reciprocating to education and children, but have no concept of letting people keep their money to spend as the family deems best on their children and their education at all levels.

George Carlin: "There's three thing politicians hide behind... The Flag, The Bible, and Children."