• Amazon Tax,  Internet Sales Taxes

    Amazon.Com Takes Internet Sales Taxes to the California Ballot Via a Referendum

    I had some of this last night but now there is more, including some of the political calculus.

    Amazon.com, in a fresh attack on California’s new online sales tax law, is pushing a ballot referendum to have the law repealed.

    The Internet retailer Monday called it “a referendum on jobs and investment in California.” The effort comes two weeks after the law was signed by Gov. Jerry Brown. It requires online merchants to collect sales tax on goods purchased by Californians.

    Amazon hasn’t been collecting the tax. The Seattle retailer responded the day the law took effect by severing ties with its 10,000 California affiliates – individuals, businesses and nonprofits that earned commissions by referring customers to Amazon. Dozens of other online merchants have done the same.

    A ballot referendum takes the California-vs.-Amazon fight to another level. Unlike the more commonly used initiative process, a referendum effort can produce much quicker results.

    Referendums are used to overturn laws passed by the Legislature, and the new sales tax law would be suspended once the Amazon effort qualifies for the ballot, said Chip Nielsen, a lawyer working on the referendum. The next statewide election is scheduled for February, but a pending bill would move it to June 2012.

    Amazon and its allies would need to gather around 505,000 signatures to put the measure on the ballot. In a statement, a company executive portrayed the referendum as a way to restore the retailer’s relationship with those 10,000 affiliates.

    “At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away,” said Paul Misener, vice president of public policy. “Amazon looks forward to working again with tens of thousands of small business affiliates in California that were harmed by the new law’s effect on hundreds of out-of-state retailers.”

    It is probably easier and less expensive to obtain 500,000 California signatures than pay the attorneys to wage a battle in court, since Amazon et. al. have a case pending in the New York appeals courts. This political move might buy them some time.

    I would think that any federal suit would probably want to avoid the 9th Circuit which contains California and concentrate on a direct appeal to the Supreme Court if need be.

    So, game on and note that the taxes are suspended once the referendum qualifies for the ballot -as if they were going to remit them to the state anyway.

  • Amazon Tax,  Internet Sales Taxes

    Amazon.com Files a Referendum to Ask Voters to Overturn California Internet Sales Taxes

    After writing about this issue for months, I really did not see this coming.

    Amazon.com Inc. wants California voters to decide whether to overturn a new law that forces online retailers to collect sales taxes there.

    A petition for a referendum was filed Friday with the state Attorney General’s Office so that voters can decide on the requirement, which was included in a state budget signed into law in late June.

    The new law forces online retailers to collect California sales taxes by expanding the definition of having a physical presence in the state. The requirement now kicks in if an online retailer has a related company, such as a marketing or product-development arm, or affiliates in the state – individuals and companies that earn commissions by referring visitors to Amazon from their websites.

    Passage of the law, which is projected to help the state collect an additional $200 million annually, adds California to a growing list of states that have turned to such measures in hopes of bringing in more tax revenue. Its legislature passed a similar law in 2009, but then-Gov. Arnold Schwarzenegger vetoed it.

    Billions of dollars are at stake as a growing number of states look for ways to generate more revenue without violating a 1992 U.S. Supreme Court ruling that prohibits them from forcing businesses to collect sales taxes unless the business has a physical presence, such as a store, in that state. When consumers order from out-of-state retailers, they’re supposed to pay the tax that is due, but they rarely do and it’s difficult to enforce.

    States are trying to get around the Supreme Court restriction by passing laws that broaden the definition of a physical presence. Online retailers, meanwhile, are resisting being deputized as tax collectors.

    Amazon had thousands of affiliates in California, which received fees varying from 4 percent to 15 percent of each sale they brought to the company. Amazon, which is based in Seattle, cut ties with them after the law’s passage.

    Paul Misener, Amazon’s vice president of public policy, said the referendum supports “jobs and investment in California.”

    “At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away,” he said.

    I thought Amazon.com et. al. would be headed to court rather than the political arena which in California will certainly be expensive – more expensive to gather signatures for a referendum and then a television, plus direct mail campaign to overturn the law. But, it will certainly give the California GOP an issue to run on in 2012.

    Maybe they will do both?

    I will have the links to the exact language of the referendum and post some updates when they are available.

  • Pinboard Links

    Flap’s Links and Comments for April 18th on 18:41

    These are my links for April 18th from 18:41 to 18:49:

    • Speaker John Boehner asks Dem Nancy Pelosi to join him in cutting funds from the DoJ to defend DOMA – Speaker John Boehner asked House Democratic Leader Nancy Pelosi's for her support to cut funds for the Department of Justice and use them to defend the Defense of Marriage Act.

      In a letter sent to Pelosi (D-Calif.) Monday, Boehner (R-Ohio) wrote that the funds Justice would have used to protect the law should be used by the Bipartisan Legal Advisory Group (BLAG) to protect the act.

      "The burden of defending DOMA, and the resulting costs associated with any litigation that would have otherwise been born by DoJ, has fallen to the House," Boehner wrote. "Obviously, DoJ’s decision results in DoJ no longer needing the funds it would have otherwise expended defending the constitutionality of DOMA. It is my intent that those funds be diverted to the House for reimbursement of any costs incurred by and associated with the House, and not DoJ, defending DOMA."

      The speaker also argued the funds Justice would have used to defend DOMA should be used by BLAG so that taxpayers aren't burdened with the additional expenses.

      =====

      Yeah and pigs fly.

      By the way, Nancy Pelosi represents most of San Francisco where a large gay population resides.

    • Illinois-based Amazon affiliates go dark because of Amazon Internet Sales Tax – JEREMY HOBSON: Today is the day thousands of retailers in Illinois had been dreading. That's because they'll lose their affiliation with online retailers like Amazon and Overstock.com, thanks to a new state sales tax for online purchases.

      But as Tony Arnold reports from Chicago Public Radio, Amazon and others have already found a way around the tax.

      TONY ARNOLD: Brad Wilson runs the aptly named BradsDeals.com — a coupon web site based in downtown Chicago.

      BRAD WILSON: Ultimately, Amazon and Overstock hold the trump card in this situation.

      Wilson says after today — Amazon will boycott business with BradsDeals — and roughly 9,000 other retailers in Illinois to skirt the tax. Illinois residents can still go online and get the latest best seller from Amazon, they just won't be getting that book from any Amazon affiliate in Illinois.

      WILSON: We're looking at a lot of options that I wouldn't want to have ever had to think of, unfortunately.

      Wilson says he's considering picking up shop and relocating to another state to make up for the money he'll lose. He wouldn't say how much.

      One Amazon affiliate — FatWallet.com — has already moved its headquarters from Illinois to Wisconsin which doesn't have the online tax. Amazon did not respond to requests for comment.

      Meantime, Overstock.com's president Jonathan Johnson confirmed his company plans to cut off Illinois affiliates on May 1st. Others like Zappos and Shoes.com are planning a similar move.

      =====

      Just like they will do in California if the California Democrats have their way with imposing a California based Amazon Tax.