Amazon Protests California Taxes

If Seattle-based Amazon doesn’t get its way with the state of California, it may be taking its toys and going home.

Reuters and other news outlets reported late Thursday that the huge online retailer promised the California State Legislature it would open a warehouse in California and create 7,000 jobs if the state would hold off on demanding sales tax for two years. California Gov. Jerry Brown signed legislation that would have required Amazon to start collecting a 7.25 percent base tax on online purchases by today.

California organizations and some lawmakers are against the deal. Amazon has sweetened the pot by saying it would also stop pushing for a repeal of the sales tax law.

The 17-year-old online company, which was founded by Jeff Bezos, started as a place to buy books. Operating over the Internet, Amazon has not been required to charge its customers a sales tax on each purchase.

Unemployment is the most important issue in this country right now. Today it was announced that the jobless rate is holding fast at 9.1 percent nationwide. There was 12 percent unemployment rate in California as of July.

Amazon is negotiating with the California government, using an issue of great importance to its customers as leverage, something it has done in other states successfully. If the company gets what it wants, it has done so in an unsavory way; by seemingly holding these jobs over the heads of legislators. If it doesn’t work out, the company has to collect the sales taxes and will the jobs not happen? How will they explain that?

[image via, a story about the same issue in Kentucky in July]