The fight started hours after Gov. Jerry Brown signed legislation “that would have required Amazon to start collecting a 7.25% base tax on online purchases.” (LA Times)
Paul Misener, Amazon’s vice-president of global public publicity responded, “This legislation is counterproductive and will not cause our retail business to collect sales tax for the state.”
With a sales force of commission only affiliates, 25,000 strong in California, the government and merchants alike are crying unfair with Amazon’s policy of non-sales tax from online sales.
California merchants have a clear concern. Comparatively, Amazon and other online-only retail stores have an unfair advantage essentially offering a nearly 10% discount for the same or similar products online.
The government sees sales emanating from a California business, even an affiliate, as taxable. In fact, “Amazon’s sales model denies the cash-strapped state treasury and local governments about $317 million a year in tax revenue.”
The small and freelance-business owners are torn. Amazon’s affiliate program brings in enough to pay for items such as cable or phone bills. Not a lot, but enough to ease the financial pressure.
But Larry Darnell, who sells guitars and artworks on the Internet from his home in the Santa Cruz County town of Felton, said he believes Amazon should collect sales tax.
“I don’t think they’re a particularly good corporate citizen,” said Darnell. “We all live in the system and contribute to the state, and they don’t want to do it. Quite frankly, the money the state is going to acquire is not too much, but every little bit helps.”
Despite Amazon’s assurances they would not impend the sales tax, many online associates have closed deals early to avoid the 7.25% required tax increase.
