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Originally published September 7, 2011 at 6:54 AM | Page modified September 8, 2011 at 9:57 AM

Calif. Democrats scoff at Amazon's offer to trade jobs for tax delay

Amazon has cut a deal with top California legislative leaders to avoid a ballot battle over the state's insistence that the online retailer collect state sales tax on purchases by Californians.

Los Angeles Times

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Amazon has cut a deal with top California legislative leaders to avoid a ballot battle over the state's insistence that the online retailer collect state sales tax on purchases by Californians.

Amazon would delay collecting taxes until September 2012, according to multiple sources directly involved in the matter. A new state law mandated that it gather the fees starting this past July. Instead, Amazon has poured $5 million into collecting signatures for a referendum challenging the law.

Under the deal, Amazon's referendum would never make it to the ballot. It would clear the way for a special legislative maneuver to make the sales-tax law impervious to challenges at the polls. If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon's deal with California.

The sources declined to be identified because the deal has not been made public.

Notably, there is no word yet from California Gov. Jerry Brown, who last week rejected an olive branch from Amazon that included the offer of opening two distribution centers in the state in exchange for being allowed to start collecting the tax in 2014.

"I'm concerned about anything that would reduce revenues going forward because we're in a very uncertain economy," the governor said last week. "We need more revenues unless we're going to keep curbing schools, courts, corrections."

However, Senate Democrats and Republicans have signed off on the latest deal, as well as the Assembly's Democrats, the sources said.

Earlier, California Democrats denounced the offer by Amazon to create thousands of new jobs if the state postponed for more than two years its effort to force online merchants to collect sales taxes on purchases by Californians.

Legislators and their bricks-and-mortar retail allies cast doubt that Amazon would follow through with a promise to build two distribution centers in the state and hire up to 7,000 people.

The company, which has a total workforce of 38,000, has made similar promises in other states that also are trying to force Amazon to collect sales taxes, they said at a state Capitol news conference Tuesday.

"More jobs will ultimately be created in California when we have a tax system that is fairly and adequately applied to everyone in our state," said Assembly Speaker John Perez, a Democrat.

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