Amazon
proposes to bring 7000 new jobs to CA in exchange for dropping tax bill,
lawmakers skeptical
Amazon’s game of Chicken with California lawmakers just reached a
stunning new height. This week, the e-commerce leviathan proposed a
compromise: it will open six new distribution centers capable of hiring as many
as 7,000 full-time workers in California if the state agrees to drop the
Internet sales tax law. Will lawmakers bite? It’s not looking good.
Addressing the issue at Sacramento’s
Radisson hotel, Governor Jerry Brown did not shoot the proposal down
altogether, but he made it clear that he’s not thrilled with the idea of giving
up tax revenue in exchange for jobs, according to the Sacramento Bee.
"Look, we need more revenues
unless we're going keep curbing schools, courts, corrections,” he said.
If passed, AB 155—also known as the “Amazon tax” bill—could potentially bring in an additional $200
million a year in tax revenue by forcing out-of-state online retailers to
collect sales tax from California-based customers. By contrast, Amazon’s
proposal would bring 7,000 jobs to California over the course of the next four
years. But if the law passes, Amazon will cut ties with some 10,000
affiliates in California.
The California Retailers Association
counters that Amazon has already cost California 18,000 jobs and $7.1 billion
in lost economic activity in 2010 alone, due to the company’s disregard for
California sales tax.
"They might be adding seven
[thousand jobs], but we're going to go out of business," Bill Dombrowski,
head of the California Retailers Association, told the Sacramento Bee.
Interestingly, the California
Retailers Association includes Wal-Mart, which was recently called into
question for the fact that some of its own affiliates do not collect sales
taxes on California transactions. The LA Times found that CSN Stores of Boston has been selling
hundreds of items on Walmart.com without collecting sales taxes, despite Wal-Mart’s
very public efforts to get the Internet sales tax bill passed. When
questioned as to why it doesn’t collect sales taxes on California-based
purchases on Walmart.com, Wal-Mart said that it is not responsible for
collecting taxes; the responsibility falls on the Marketplace Retailer.
Since the tax bill brouhaha began
back in July when it took effect, Amazon has funneled $5 million into an
initiative to overturn the law by taking it to the voters. California
lawmakers have countered that effort by inserting an “urgency clause” into the
bill to prevent it from going to the ballot box.
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