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Amazon reaches deal over online sales tax in California

SACRAMENTO, Calif. ó In a deal with state lawmakers and brick-and-mortar stores, Amazon tentatively agreed Wednesday to stop fighting a requirement that Internet retailers collect sales tax on California purchases.|By Kevin Yamamura and Dan Smith, McClatchy Newspapers

SACRAMENTO, Calif. ó In a deal with state lawmakers and brick-and-mortar stores, Amazon tentatively agreed Wednesday to stop fighting a requirement that Internet retailers collect sales tax on California purchases.

Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes.

The arrangement could lay the groundwork for a national online sales tax law. Amazon and major brick-and-mortar retailers such as Wal-Mart and Barnes&Noble agreed to lobby Washington over the next 11 months for an Internet sales tax law that applies across 50 states.

“Basically, Amazon will get a safe harbor to lobby Congress and the retailers will go hand-in-hand with them to adopt a law that will apply to all of the states,” said Assemblyman Charles Calderon, D-Whittier.

If no federal deal emerges by July 31, 2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012. State lawmakers intend to pass a new bill in the next two days that would delay implementation of the online sales tax law until that date, according to Calderon and several sources.

If Congress strikes a deal by July 31, 2012, online retailers would begin collecting taxes starting on Jan. 1, 2013, under whatever federal requirements are approved.

Gov. Jerry Brown has not weighed in, but Calderon said the governor is aware of the arrangement.
“We’re hopeful, but the reality is I don’t think anyone knows what the governor will do. We think there are strong arguments for it.”

Under the compromise, California would not collect $200 million in tax revenues that the state had projected in the current 2011-12 fiscal year. The state has already fallen behind its projections for total revenues in June and July.

“We’re well into the fiscal year and there’s no money coming in anyway,” Calderon said.

Seattle-based Amazon and brick-and-mortar stores have been at odds for years, with big-box retailers asserting that online companies had an unfair pricing advantage.

The two sides were on the verge of turning California into a campaign battleground. Amazon devoted $5.25 million this summer to collecting signatures for a 2012 referendum that would have asked voters to overturn California’s online sales tax law, which lawmakers passed as part of the June budget deal.

Amazon’s referendum would essentially become moot if lawmakers agree on a new law that immediately supersedes the original one. The company is expected to drop gathering signatures as part of the deal.

It was not immediately clear if Republicans would pledge their support, though Senate Republican Leader Bob Dutton, R-Rancho Cucamonga, was present when the deal was struck Wednesday in the offices of Senate President Pro Tem Darrell Steinberg, sources said. Besides the Senate leaders, Assembly Speaker John A. Perez and representatives for Amazon and retailers engaged in the conversation.

Amazon does not have to move jobs into California as part of the deal, though sources said they believe the company may relocate some operations.

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(The Bee’s Dale Kasler contributed to this report.)|

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