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California's top Democrats reject Amazon offer

Legislators and retail allies cast doubt that Amazon would keep a promise to build distribution centers and hire up to 7,000 people if the state held off on forcing the collection of sales taxes for online purchases.

September 07, 2011|By Marc Lifsher, Los Angeles Times
  • Amazon is cynically promising jobs that arent going to materialize, Assemblywoman Nancy Skinner, right, said at the state Capitol.
Amazon is cynically promising jobs that arent going to materialize, Assemblywoman… (Rich Pedroncelli, Associated…)

Reporting from Sacramento — Top Democrats denounced an offer by Internet retailer Inc. to create thousands of new jobs if the state postpones for more than two years its effort to force online merchants to collect sales taxes on purchases by Californians.

Legislators and their bricks-and-mortar retail allies cast doubt that Amazon would follow through with a promise to build two distribution centers in the state and hire as many as 7,000 people.

The company, which has a total workforce of 38,000, has made similar promises in other states that also are trying to force Amazon to collect sales taxes, they said at a state Capitol news conference Tuesday.

"More jobs will ultimately be created in California when we have a tax system that is fairly and adequately applied to everyone in our state," Assembly Speaker John A. Pérez (D-Los Angeles) said.

"And, we're not going to allow the notion of jobs that may or may not materialize to dictate our position on an issue of fundamental fairness to all businesses in California," he said.

Amazon, said Assembly Rules Committee Chairwoman Nancy Skinner (D-Berkeley), is "cynically promising jobs that aren't going to materialize."

California has lost about 18,000 jobs because of unfair competition from Amazon and other Internet sellers that don't collect sales taxes, enabling the online merchants to undercut store prices, said Bill Dombrowski, president of the California Retailers Assn.

A spokesman for Amazon's "More Jobs Not Taxes" referendum campaign did not respond to requests for comment.

The company and its allies are close to gathering the required number of signatures on petitions to get the referendum on the June 2012 ballot. The referendum would ask voters to repeal a new state law requiring the collection of sales taxes by out-of-state Internet companies that have offices, workers or other connections in the state. The company has refused to comply with the law, which took effect July 1.

In the meantime, Democrats in the Senate and the Assembly, as well as lobbyists hired by big-box retailers, are trying to persuade a handful of Republican members to vote for a new, similarly worded bill that would replace the recent law, thus nullifying the Amazon referendum. Also, as a so-called urgency measure, the proposed law would be immune to a voter referendum.

The Democrats need support from at least two-thirds of each house.

"I think we're close on the votes," Assemblyman Charles Calderon (D-Whittier) said.

Attempts to garner the needed votes will be made until the scheduled legislative recess that starts midnight Friday, he said.

Meanwhile, a trade group for former Amazon affiliates, who earned commissions for referring customers through their websites to Amazon, complained that its members were having a hard time surviving without Amazon.

Amazon canceled their contracts to try to avoid becoming subject to the tax-collection law.

According to a survey by the Performance Marketing Assn., 37% of affiliates have lost more than half their income; 22% went out of business and 32% said they had left or were planning to leave California.

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