California Assembly Passes Amazon Internet Sales Tax Legislation – Lawyers Get Rich

The last of three bills aimed at getting the Seattle giant and other out-of-state online retailers to pay sales tax passed the Assembly on Wednesday afternoon.

“It’s something we’ve been working on for years,” said Assemblywoman Nancy Skinner, D-Berkeley, who authored the bill. “But this is the first time that so many businesses up and down the state are supporting it.”

A companion bill, authored by Assemblyman Charles Calderon, D-Whittier (Los Angeles County), passed the full floor on a 47-16 vote on Tuesday.

“This bill levels the playing field for businesses in California,” said Assemblyman Bill Berryhill, R-Ceres (Stanislaus County). “Not a day goes by when I don’t hear from businesses about their ability to compete.”

Which is what supporters of the so-called e-fairness legislation have been shouting from the rooftops for years, despite vetoes from former Gov. Arnold Schwarzenegger and dire threats from Amazon.com (2010 profit: $34 billion) and Utah’s Overstock.com to pull their affiliate business out of the state.

So, what comes next?

Senate action on the two Assembly bills, AB 153 (50-21- 9) and AB 155 (52-20 -8) and Assembly Action on SB 234 (22-17). Then the complimentary legislation if passed would go to Democrat Governor Jerry Brown. But, these bills passed with simple majority votes and some maintain that these “new” taxes fall under the jurisdiction of California Proposition 26, which requires a super legislative majority in order to pass.

I smell a lawsuit and a state court case, unless Governor Jerry Brown vetoes these bills, like Governor Arnold Schwarzenegger did in the past two legislative sessions.

In the meantime, if the bills become law, the actions should come swift from Amazon and the other internet sales tax targets, as they will pull their business out of California to reduce their liability.

And, as to the nexus issue, they will file probably a federal lawsuit.