Amazon sweetens deal to end collection of sales tax

Amazon hopes to squash a growing movement towards taxing online commerce by proposing on Tuesday, August 30, 2011 to open six distribution centers that would employ 7,000 Californians. In return, Amazon wants a reprieve from the new law passed in June 2011 until 2014. The new law forces  internet retailers to collect sales tax from California customers. According to Sacramento Bee reporters Dale Kasler and Torey Vann Oot, Amazon has used a similar tactic elsewhere with some success. In South Carolina earlier this year, Amazon threatened to scuttle a big new distribution center until the Legislature agreed to a five-year moratorium on sales tax collection. Amazon must create at least 2,000 jobs by late 2013 for the deal to remain in effect. In Tennessee, the state government agreed to allow Amazon won’t have to collect taxes on goods shipped from the three distribution centers Amazon is building. In Texas, however, Gov. Rick Perry signed an online sales tax bill this year despite Amazon's threat to close an existing distribution center. The tax was part of a wide-ranging budget bill. Amazon followed through on its threat to close the distribution center.

Amazon has spent $5 M to put a referendum on CA 2012 June’s ballot to overturn the sales tax law. The law is estimated to collect $200 million a year in new tax revenue.