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Ear to the Ground

Amazon Wins Tax Break, California Wins Jobs

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Posted on Sep 24, 2011
Flickr / planetc1 (CC-BY-SA)

Amazon.com struck a deal with California on online sales taxes Friday, agreeing to create thousands of jobs in exchange for a one-year reprieve from collecting state sales taxes.

The online retail giant agreed to begin collecting sales taxes in California by September 2012, though only if Congress doesn’t first pass a federal online sales-tax policy. Amazon, in return for the tax break, said it would create at least 10,000 full-time jobs and hire 25,000 seasonal workers by the end of 2015, a much better deal for California than Amazon had initially offered when talks began in June. —BF

The Wall Street Journal:

The compromise comes as Amazon fights efforts by California and other states to require it to collect sales taxes on purchases made via the site. Seattle-based Amazon has said it wants a federal law to cover the issue, rather than a state-by-state system.

Amazon had previously floated a compromise plan in California that would have it creating 7,000 full-time jobs in the state by 2015, while gaining a reprieve on the sales tax issue until 2014.

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By stacy, September 26, 2011 at 6:08 am Link to this comment
(Unregistered commenter)

I like the way these corporations get breaks on sales tax, yet they still
charge them to the customer.

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Kjeld's avatar

By Kjeld, September 25, 2011 at 7:17 pm Link to this comment

Had the “for hire” election initiative signature collectors in front of my Peets last month,
collecting signatures to block the CA tax internet sales initiative. I asked them why they
want Amazon to have such a competitive advantage over the stores there in the same
strip mall. They hire people in locally and they pay taxes here.

It is sad that the big box stores have decimated locally owned hardware stores,
bookstores, etc. But they did it by fashioning more cost effective supply chains. Amazon
is doing it by relying on tax code that should not be on the books in 2011.

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By jrundin, September 24, 2011 at 5:54 pm Link to this comment

Amazon is a notoriously exploitive employer. These won’t be good jobs.

I boycott amazon.com for a number of reasons, but I have to say, their refusal to pay sales taxes really angered me.

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Robespierre115's avatar

By Robespierre115, September 24, 2011 at 12:51 pm Link to this comment

So basically jobs are created if the state bows down to corporate demands? What a stellar democracy!

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By El_Pinguino, September 24, 2011 at 11:00 am Link to this comment

Another spectacle of corporate control over sovereign government.

There should be no deal making. What should happen is governments should pass laws that are quite clear in their scope and intent. No more gray area crap. Online sales will be taxed. It is just a question of who. This agreement depends on a totally dysfunctional Congress.

But then, those politicians would not be reelected if they were a little more black and white.

For there is one necessary ingredient in any dysfunctional relationship: chaos

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By mrfreeze, September 24, 2011 at 10:56 am Link to this comment

This is the same sort of corporate “extortion” that plays itself out in WA State where Boeing pays virtually NOTHING in taxes because it “creates jobs.” Boeing has always claimed a “job multiplier” to justify not paying to be here. The theory goes like this: for every Boeing job thre are 7 ancillary jobs created in the local economy. Funny thing is Boeing has been attempting to LOWER wages and benefits to its workers for years. Does this mean that if fewer multiplier-jobs are created, then Boeing will start paying taxes?????

The fact is, these large corporations are simply waiting for the day when all of their operations have moved to greener pastures (e.g. where they can pay virtually nothing in labor costs offshore). At that point, all of our tax subsidies to them will be yet more hard-earned capital washed down the toilet.

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By SoTexGuy, September 24, 2011 at 10:20 am Link to this comment

So.. they’ll be good citizens if they are paid to be?

Or.. ‘we’ll create as many jobs as the other taxpayers are willing to pay for’?

Great deal making, California.

Adios.

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