Amazon's Petition Successful, California Voters Can Overturn Online Sales Tax Law

Paul Lilly

It will be up to California residents to decide whether or not Amazon and other online retailers will have to collect sales tax in their state. According to the Associated Press , the California Attorney General's Office approved Amazon's petition for a referendum that will give voters the chance to overturn a new controversial law that altered what it means to have a physical presence in the state.

The next step for Amazon is to collect 505,000 signatures from registered voters living in California so that the referendum can be included on the next ballot. Amazon has until September 27th to secure the necessary John Hancocks, and if Amazon is able to do that, California would be forced to suspend the new law until voters decide one way or another next June, The Sacramento Bee reports .

At issue here is whether or not Amazon and other etailers should be forced to pay sales tax for orders routed through California via affiliate websites. Amazon doesn't have any warehouses or offices in California, and according to supporters of the new law, the legislation closes a loophole that created an uneven playing ground between in-state brick-and-mortar retailers and online retailers like Amazon.

Amazon responded by ending its affiliate program in California, cutting ties with 10,000 in-state affiliates who refer customers to its website. As far as Amazon is concerned , those are lost jobs, and "at a time when businesses are leaving California, it is important to enact policies that attract and encourage businesses, not drive it away."

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