Amazon’s money grab
Online retailer using ballot to protect unfair business advantage
If you’ve been to the supermarket lately, you’ve probably seen a signature-gatherer there touting a referendum petition having something to do with the Internet. Disregard his or her explanation of the proposal—chances are it’s inaccurate and misleading—and instead read the measure. Then, don’t sign it.
The petition drive is sponsored by the giant online retailer Amazon.com, which wants to use the ballot process to sustain its unfair business advantage over competitors who have actual “brick-and-mortar” stores in California, hire California workers and collect California sales taxes.
As it stands, Californians are legally required to pay use taxes—equivalent to sales taxes—on their online purchases when they file their state income taxes. Almost none do so, however, and collecting the taxes is not cost-effective for the state. As a result, it loses an estimated $1.1 billion in revenue each year, and millions of Californians become inadvertent tax evaders.
Heretofore online retailers have not been required to collect the taxes, giving them a price advantage of nearly 10 percent over brick-and-mortar stores. Earlier this year, Gov. Jerry Brown signed a bill requiring large online retailers like Amazon to begin collecting the tax. Amazon refused, jettisoned its 10,000 state affiliates, and began circulating a petition to qualify a referendum.
This is yet another in a line of special-interest ballot measures (think Mercury Insurance, PG&E and Texas oil companies) designed to benefit a single industry or company at a cost to the rest of the state. Amazon has plenty of ways to be competitive, beginning with the sheer volume and variety of its products and the discounts it can offer, without needing an unfair pricing advantage. It should pay taxes like any other business.