LOS ANGELES (CBS) — Will the governor of California grant online retail giant Amazon a reprieve on a sales tax in exchange for the promise of thousands of jobs?
A new law aimed at closing a tax loophole for items bought online in order to drum up revenue for the cash-starved state could be the only thing separating 7,000 new jobs from coming to California.
George Runner at the Board of Equalization told KNX 1070 that Gov. Jerry Brown is wrong if he believes the so-called “Amazon tax” would generate millions in revenue for the state this year.
“The current law that has passed is not collecting any money,” said Runner. “We have not had one out-of-state retailer who has registered to collect sales tax.”
Amazon wants a two-year moratorium on the tax in exchange for a physical presence in the state, which will then make them legally responsible for them to collect sales tax — a result Runner said is “a win-win deal”.
The retailer is also taking its fight against the tax to court along with filing a ballot petition that would potentially repeal the law.
But as H.D. Palmer, deputy director of the state Department of Finance told KNX 1070, there is already legislation in place requiring Amazon to collect taxes on all out-of-state purchases.
“This isn’t a dynamic about taxes versus jobs, this is a dynamic where you have a corporation which, under their proposal, would like to be excluded from collecting taxes while expanding their physical presence in California.”
Palmer said the law is expected to garner an estimated $200 million in revenue for the state.
A coalition of nonprofit organizations recently threatened a boycott over the company’s opposition to the sales tax law, but there is no data confirming any significant rise in the number of Amazon accounts canceled in response to the boycott.