One of the nation’s largest online retailers is seeking a referendum to bring before voters the issue of whether such companies are required to charge sales tax for their products, even if they do not have a physical presence—a brick-and-mortar retail location—in the state.
Seattle-based retail giant Amazon.com filed a petition July 11 to bring a measure to the ballot on whether the new sales tax requirement, which was included in the state budget passed in June, should be allowed to move forward.
Since the passage of the new law, Amazon has refused to collect the 7.25 percent sales tax, claiming it’s unconstitutional.
Paul Misener, Amazon.com’s vice president of public policy, issued a statement following the company’s filing, saying the proposed referendum will support jobs and investment in California.
“We support this referendum against the recent sales tax legislation because, with unemployment at well over 11 percent, Californians deserve a voice and a choice about jobs, investment and the state’s economic future,” Misener said in the statement. “At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away.
“Amazon looks forward to working again with tens of thousands of small business affiliates in California that were harmed by the new law’s effect on hundreds of out-of-state retailers. As Governor Brown has made clear, it is important to directly involve the citizens of California in key issues and we believe that Californians will want to vote to protect small business and keep jobs in the state.”
Previously, before the new law passed, only Internet retailers with a physical presence were required to collect the state sales tax. Under the new law, retailers with related businesses or affiliates in California must now also collect the tax. That has already led Amazon to sever ties with thousands of small businesses that refer customers to Amazon through their own websites. The company cut its ties with thousands of its affiliates in California after the new law passed in June.
Amazon said it was seeking the ballot measure for as early as February.
This article appears in Jul 14-21, 2011.