This is really the bottom of the barrel. California has a bill in the legislature that will require Amazon.com and other out of state Internet retailers to collect sales tax on transactions where the buyer lives in California. For years now, Amazon has been evading collecting these taxes. And the State of California has been turning a blind eye. This deprives the state and cities of much needed revenue to support education, police and fire services. It also gives Amazon an unfair competitive advantage over California businesses that are required to collect the taxes. Thus the state has been supporting out of state business at the expense of local business and community services. In essence, California has been giving a tax break to citizens who buy products on-line. It is a disgrace and is probably illegal.
But it gets better. At last, the State of California has started to get cojones and try to get Amazon to do its duty and collect the taxes. God knows we need that revenue. A similar law has already been passed in New York and is being considered in North Caralina and Hawaii. Yesterday Amazon sent a letter to the California state legislature. (read about it here). Amazon warned the legislature that if California tried to get them to collect sales tax, they would stop doing business with all Amazon “affiliates” in California. Amazon has hundreds of thousands of these affiliates. These are the websites that link to Amazon and get commissions back for all sales originating from the link.
So this is rich. Not only has Amazon evaded collecting California sales tax, thus adding to the burdens of state services; but in retaliation they are going to cut off these affiliates who drive business to Amazon and get money back in return. Most of these affiliates are non-profits and PTA’s, the very entities that are already being hurt by the California economic crisis and by tax evading large corporations like Amazon.com.
I don’t know what the rest of you think about this. But I think it stinks.
Jeff Bezos ought to be ashamed of himself.