Online retailers like Amazon will begin collecting sales taxes in California next September, unless they convince Congress to pass a national policy on Internet sales taxes, according to a bill signed Friday by Gov. Jerry Brown.
The law represents an 11th-hour compromise between state legislators and online and brick-and-mortar retailers.
The governor had signed a bill in June requiring out-of-state online retailers like Amazon to collect sales tax. Amazon quickly shelled out more than $5 million to try to put a measure on the June 2012 ballot repealing the law.
As part of the compromise, Amazon has agreed to drop that referendum effort — and promised to create 10,000 full-time jobs and hire 25,000 seasonal employees in California by the end of 2015.
“A prolonged, costly ballot battle is a benefit to no one,” Brown said in a statement Friday. “This landmark legislation not only levels the playing field between online retailers and California’s brick-and-mortar businesses, it will also create tens of thousands of jobs and inject hundreds of millions of dollars back into critical services like education and public safety in future years. It’s time for Washington to follow our lead and forge a bipartisan national solution.”
The governor's press release included a quote from Paul Misener, Amazon's vice president of global public policy.
“Amazon is grateful for Governor Brown's support of this bill and enactment of federal legislation, and we look forward to creating thousands of jobs in California,” Misener said.
The state loses an estimated $1 billion each year from uncollected taxes on purchases. Of that, about $83 million can be attributed to Amazon, according to the state Board of Equalization.