California Strikes a Deal With Amazon

Posted on Sep 8, 2011

Flickr / thisisbossi (CC-BY-SA)

California legislators cut a tentative deal with Amazon.com Wednesday night that would allow the online retail giant to postpone collecting sales taxes from Californians until September 2012.

In return, the company said it would drop its efforts to overturn the state’s new sales tax law, which took effect in July.

Amazon earlier had offered to open two distribution centers in California that would generate more than 7,000 jobs in return for a tax break until 2014, but Gov. Jerry Brown refused. There was no word from the governor’s office on whether he would sign off on the new deal. —BF

The Los Angeles Times:

If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon’s deal with California.

“It’s a safe harbor for up to a year,” Calderon said of the agreement he helped strike. “If they can’t get Congress to act by next July, then they will start to collect the tax in September 2012. If by chance they get Congress to act, then that would trump the state law.”

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