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August 3, 2011

Have you signed the referendum to ban California's internet sales tax?


The petitioners have been out in force this week outside grocery stores in downtown Walnut Creek.


They are asking for signatures to support a referendum that would let voters decide whether to overturn a new state law that forces online retailers to collect sales taxes in the state.

The petition is sponsored by online retailer giant Amazon.com. As of July 1, the law requires online-only retailers to collect a base 7.5 percent California sales taxes on any item purchased or funneled through a California resident.

Governor Jerry Brown advocated for the law because it would allow financially hard-up California to collect as much $317 million in state and local revenue by June 30. California, like New York and other large states, wants to collect billions of dollars from online retailers that they believe it is owed. Proponents, which include national chains with brick-and-mortar locations, believe taxes on Internet sales taxes level the playing field. It prevents Amazon, Overstock.com and other Internet-only competitors from selling merchandise to consumers at substantially lower prices.

While bankrolling the push to overturn California's law, Seattle-based Amazon has thrown its support behind "the Main Street Fairness Act," a proposed federal Internet sales taxes law. Sen. Dick Durbin (D-Ill.) introduced legislation that would require Internet-only retailers to add sales taxes to customers' bills, the Los Angeles Times reported. Rep. John Conyers Jr. (D-Mich.) plans to introduce a similar measure in the House. While out-of-state retailers have been able to offer customers discounts online, consumers have had report the sales tax owed on online purchase on their tax returns.

Amazon opposes state-specific online tax legislation because it would be difficult to report and collect taxes. But it supports tax legislation at the national level. Paul Misener, Amazon's vice president for global public policy wrote in a letter to Durbin that his company supports "a simple nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location or level of remote sales."


To bring its measure before Californians in the next statewide vote in February, Amazon must gather more than 500,000 signatures by late September.

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