Amazon Wants California Voters to Decide Sales Tax Issue

Amazon said it would seek a ballot initiative to strike down a new law in California that forces online retailers to collect sales tax, the New York Times reported. The earliest the initiative could be put to voters is February 2012.

Amazon recently cut off relations with its affiliates in California in order to avoid complying with the requirement, since the law affects only businesses with a physical presence in California. Before it was put into effect on July 1, those affiliates didn't count as a presence; now they do.

However, California officials say that Amazon's actions don't negate its tax responsibility from this year, which is estimated at $83 million. Amazon's next tax payment is due at the end of the quarter, which ends Sept. 30. The State of California estimates that it loses about $1.2 billion a year in unpaid sales taxes, partly due to online e-tailers like Amazon.

Whether or not Amazon has to pay depends on your definition of "physical presence." Putting aside afflilates, Amazon has subsidiaries in the state, says the Times—specifically, an office in Cupertino that designs the line of Kindle e-readers, and a Studio City office that does online advertising. Should those count?

Amazon thinks it's the wrong question, supporting a simplified sales-tax law that would be applied federally, across the country. That would require the cooperation of both Washington lawmakers and state governments. The company's sales-tax issues aren't limited to California; Amazon also cut off its affiliates in Illinois when that state also enacted a similar sales-tax law earlier this year, and it's shuttering a warehous in Texas over the issue.

For the California law, Amazon needs to get 505,000 signatures to qualify for a referendum, which would be put to voters during the next statewide election, due in February.