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Amazon Loses California Sales Tax Evasion Battle

Posted 9/29/2011 23:18 | Filed under Amazon | Comments (0)
It took the world's 8th largest economy to defeat the USA's largest tax evader.

If you've read my previous blog posts about Amazon.com, you already know this greedy company was built by Jeff Bezos on the premise of nationwide sales tax evasion. Other states, notably New York, disputed Amazon's notion that it could legally avoid collecting sales tax. Amazon fought tooth and nail against New York and every other state that dared to demand Amazon collect sales tax, using lobbying, bribery and lawsuits to avoid doing so.

Finally, California -- the world's 8th largest economy -- jumped into the battle with Amazon, and the outcome finally changed. Amazon tried its usual tactics by cutting off its California affiliates. Only problem with that strategy: as noted before, Amazon owns A9, Alexa and A2Z Development, three California companies with numerous offices and hundreds if not thousands of California employees, making the affiliate issue irrelevant.

Amazon fought long and hard against California's new sales tax law, even using the state's own system against it by spending over $5 million collecting signatures to put a proposition on the ballot. But the Democrats in the California legislature cleverly circumvented Amazon by crafting a revised law that, if passed by a 2/3 majority, would nullify Amazon's proposition. Unfortunately, enough idiotic Republicans fell for Amazon's anti-tax language smokescreen that a 2/3 majority was impossible to achieve.

But rather than face the uncertainty and massive expense of the ballot proposition, and realizing that it would probably lose any court challenge, Amazon decided to compromise. Governor Jerry Brown just signed the compromise law. Amazon will start collecting California sales tax one year from now, barring any new federal legislation that addresses the issue before then. Amazon can try to spin this, but they lost. California could be the first domino to fall as other states now realize that Amazon can be beaten (and how to do it).

A note to those idiotic Republicans: you cost your state $200 million in revenue that could have prevented library, park and school closings. Amazon tricked you into an unnecessary compromise. If you had any brains at all, you would have realized that Amazon was bluffing all along. All you had to do was vote for the revised law and Amazon would have started collecting sales tax immediately.

It's painfully obvious that Republican politicians are so pre-programmed to vote against anything having to do with taxes that they often never bother to comprehend the actual issue at hand, which in this case was simply forcing Amazon to comply with existing sales tax laws like their competitors. Shame on them, and also shame on Amazon for evading sales tax collection for more than 10 years. At least in California, that evasion finally ends in 2013.
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