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Amazon Opposes Californian Attempts to Impose Online Sales Tax

September 8th

Recent developments suggest that Amazon.com Inc. may soon have to collect sales tax from customers based in California. Last month, California Governor Jerry Brown signed an online tax-collection bill into law, in an attempt to force internet retailers to collect the same sales tax as high street stores. This is just the latest in a series of state laws demanding the enforcement of internet sales taxes; Arkansas, Connecticut, and Illinois have all passed similar bills earlier this year.

However, the law has met with significant opposition from many sides. A great many feel that the California law differs from its predecessors in that it actually violates federal law. The California bill contravenes a preexisting federal mandate, declaring that retailers do not have to collect sales taxes in states where they lack a significant physical presence.

Amazon Pursues a Ballot Referendum

The most notable opponent to the bill thus far is the large-scale internet retailer, Amazon.com. The corporation has recently gone so far as to pursue an actual ballot referendum against California’s online sales tax legislation.

While many have criticized this action as being solely in the pursuit of corporate self-interest, others have expressed their support. Forbes Magazine recently published a piece supporting the move by the internet giant. They argue that while online sales do certainly contribute to a significant decline in state tax revenue, internet retailers cannot presently be forced to comply with standard regulations.

The tax law is, at present, too complex and includes too many caveats and conflicting regulations to make such a demand on online retailers legal. However, were these states to support some federal legislation, such as the Main Street Fairness Act, this kind of action might become possible.


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