Capitol Alert

The latest on California politics and government

By Kevin Yamamura and Dan Smith

In a deal with state lawmakers and brick-and-mortar stores, Amazon tentatively agreed Wednesday to stop fighting a requirement that internet retailers collect sales tax on California purchases.

Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes.

The arrangement could lay the groundwork for a national online sales tax law. Amazon and major brick-and-mortar retailers like Wal-Mart and Barnes & Noble agreed to lobby Washington over the next 11 months for an internet sales tax law that applies across 50 states.

"Basically, Amazon will get a safe harbor to lobby Congress and the retailers will go hand-in-hand with them to adopt a law that will apply to all of the states," said Assemblyman Charles Calderon, D-Whittier, who worked on the compromise.

If no federal deal emerges by July 31, 2012, Amazon would have to begin collecting California sales taxes starting on Sept. 15, 2012. State lawmakers intend to pass a new bill in the next two days that would delay implementation of the online sales tax law until that date, according to Calderon and several sources.

If Congress strikes a deal by July 31, 2012, online retailers would begin collecting taxes starting on Jan. 1, 2013 under whatever federal requirements are approved.

The compromise means that California would not collect $200 million in tax revenues that the state had projected in the current 2011-12 fiscal year. The state has already fallen behind its projections for total revenues in June and July.

"We're well into the fiscal year and there's no money coming in anyway," Calderon said.



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