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Amazon, California Strike a Deal

Legislators approve bill that delays sales tax collection.

Amazon and other online retailers may have one more year before they have to start collecting sales tax from California residents, California lawmakers decided late last week.

That’s thanks to Assembly Bill 155, which legislators approved on Friday. The bill postpones enforcement of Assembly Bill 28, which passed in June, and requires out-of-state retailers doing business in California to collect and pay sales tax if they make more than $50,000 a year.

However, with AB 155, online retailers would not have to collect sales tax until Sept. 15, 2012, unless Congress passes federal tax laws regulating online sales tax. In exchange, Amazon has agreed to stop its efforts to put a referendum on the ballot to repeal AB 28. The new bill is being called a “compromise,” and comes after long discussions between Amazon and state lawmakers, according to news reports.

Gov. Jerry Brown has until Oct. 9 to sign or veto the AB 155. He reportedly has not said if he will approve the bill.

Amazon noted that if California gave retailers another year before they are required to start collecting sales tax, the retailer would build distribution centers in the state, creating up to 7,000 jobs. It also said it would reconnect with affiliates with which it cut ties when AB 28 passed, according to reports.

In recent months, Amazon has negotiated similar tax-exemption-for-job-creation deals in states including South Carolina and Texas.

About the author

Olga Munoz
Olga Munoz is editor of TheOnlineSeller.com. In addition to writing news and feature articles about e-commerce, selling trends, online marketing and other topics of interest to online sellers, Olga manages the site's social media efforts. A journalism graduate of Chico State, Olga says her favorite part of being a journalist is learning interesting facts that help put stories into perspective, attending industry events and meeting interesting people "that leave you smiling, even in tough situations." Opinions expressed here may not be shared by The Online Seller and/or its principals.



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