A last minute ploy by Amazon.com exempting it from collecting sales taxes for more than two years was met by firm opposition today from a host of California based businesses that support a level playing field for all retailers in California.
In exchange for a special two year “sales tax holiday,” Amazon.com offered to open six new distribution centers in California and claimed they would create thousands of jobs. As part of the recently enacted State Budget, online retailers must collect sales taxes in the same manner as traditional stores.
A study released last year by the Taxpayer Advocate concluded that the un-level playing field created by giving out-of-state companies like Amazon a competitive advantage over California retailers was costing the state billions in lost economic activity and businesses in the state have urged policymakers to reject the deal. California retail businesses physically based in the state are losing $4.1 billion in sales in 2010 to online-only retailers, and by 2015 that number will reach $7.7 billion.
Governor Brown seems to agree with our position, as noted in a Sacramento Bee story headlined “Jerry Brown signals thumbs down on Amazon proposal.” Click here to read the story.
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