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Amazon ups the ante in Internet sales tax fight

August 24, 2011|By Marc Lifsher, Los Angeles Times

Reporting from Sacramento — Amazon.com Inc. upped the ante in its effort to overturn a new state law requiring all Internet sellers to collect sales taxes on purchases by California customers.

The Seattle online retailer reported late last week that it contributed $2.25 million to the More Jobs Not Taxes campaign to qualify a referendum for the June primary election ballot. The contribution brought the company's cumulative investment in the campaign to $5.25 million.

The referendum, if signed by at least 505,000 registered voters, would ask voters whether they want to uphold the law, which took effect July 1, or repeal it. Amazon is asking for a repeal, saying the California law is an unconstitutional interference with interstate commerce.

A spokesman for the Amazon-backed campaign, Ned Wigglesworth, declined to provide details of how the Amazon money is being spent. Those specifics will become available only when quarterly reports are filed Oct. 31 with the secretary of state.

However, experts said it's safe to say that much of the funds are being used to pay professional signature gatherers. They reportedly already are off the streets, having met their goal well before the Sept. 27 deadline for turning in completed petitions.

"We're confident we're going to get them in before Sept. 27," Wigglesworth said. "The gathering is going well."

Amazon's fast work doesn't surprise Becky Warren, a spokeswoman for the Main Street Fairness Coalition, an alliance of major retailers, such as Wal-Mart Stores Inc, and independent store owners.

The coalition members operate bricks-and-mortar stores, as well as websites, that collect California sales taxes. They complain that they face unfair competition from Amazon and other big Internet firms.

Requiring Internet sellers to collect sales tax would raise about $317 million in new revenue for the coffers of California state and local governments, state financial experts have said.

marc.lifsher@latimes.com

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