By Stu Woo
Amazon.com Inc. has intensified its fight against states over sales-tax collection.
The Seattle-based retailer filed a petition to start the process of getting a measure on the California ballot to ask voters to repeal a recently passed state law that requires online retailers to collect sales taxes. The company has until late September to gather and submit 504,760 signatures to qualify the measure.
If Amazon can do so, the measure will be placed on the ballot for the next statewide election, which is scheduled for Feb. 7, 2012.
State officials confirmed that they received Amazon's petition, filed on Friday.
"This is a referendum on jobs and investment in California," said Paul Misener, Amazon's vice president of public policy, in a statement. "At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away. Amazon looks forward to working again with tens of thousands of small business affiliates in California that were harmed by the new law's effect on hundreds of out-of-state retailers."
California last month became at least the ninth state to pass a law aimed at forcing online retailers such as Amazon to collect sales taxes. Arkansas, Connecticut and Illinois also enacted such legislation this year.
State lawmakers say they passed the laws to help close budget shortfalls and to help small businesses and major brick-and-mortar retailers, which complain that Amazon's tax-free sales give the online retailer an unfair sales advantage.
Both Democratic and Republican legislators support the laws because they technically aren't tax increases. Every state that has a sales tax also has what is known as a use tax. It requires individuals and businesses to report taxes owed on purchases from out-of-state retailers every year. Individuals are typically supposed to do this on their income-tax filings, but few do.
Most of the online sales-tax-collection laws haven't worked for most of these states, where Amazon continues to make tax-free sales. Most of the laws, including California's, require online retailers to collect state and local sales taxes if they have online affiliates in the state. An online affiliate is a website, such as a blog, that receives a commission for referring traffic to Amazon and other online stores.
Amazon has responded to such legislation by cutting ties with affiliates in most of those states, including California. Affiliates have lobbied against the legislation.
The California law is more far-reaching than the laws the other states passed. One component of the legislation requires online retailers to collect sales taxes in the state if they have subsidiaries developing products for their retail operations. Amazon operates a California-based subsidiary that develops its Kindle electronic book-reader and its digital-music store.
A group supported by big-box retailers derided Amazon's attempt to repeal the California law. "Amazon.com's actions prove that the online-only retailer will say and do anything to maintain an unfair competitive advantage over brick-and-mortar businesses in California," said Danny Diaz, a spokesman for the Alliance for Main Street Fairness, in a statement. The organization is backed by Wal-Mart Stores Inc., Target Corp. and other large chains.
An Amazon spokeswoman didn't respond to requests for additional comment on the California measure.
It is unclear whether Amazon is working with any political groups or other companies to pass the ballot measure. It is also unclear whether the company will fund the signature-gathering process—which typically costs $2 to $3 per signature—or the campaign to pass the measure should it qualify for the ballot.