Amazon Fights Back Against California Internet Sales Tax Law

The new California internet sales tax law goes after Amazon. Amazon has responded by starting a move to get the issue put on the ballot in the next election. 

California usually leads the nation when trying to come up with new ways to work over businesses for every buck they can get. This was not the case when it came to the spate of internet sales tax laws passed by states across the nation. The problem was the Governator was in office and refused to sign such a law. He is now out and “tax and spend” Governor Jerry Brown is in and has never met a new tax he doesn’t like. Given this, it is no surprise we now have an internet sales tax. 

Unlike the states, Amazon seems to have a strategy laid out for fighting this initiative as long as possible. The first step is to react by terminating all the affiliates in the state, which gets rid of the nexus that is required for the law. In New York, it then sued the state in anticipation of a long battle to get to the Supreme Court to get a full decision.

Amazon has taken a different approach in California, a smart one. The company is launching an effort to contest the law by putting a measure on the ballot to revoke it and, hopefully, subject Governor Brown and his political chums to 30 lashes each. California works on the ballot process, which is probably one reason the state is such an utter mess. Regardless, Amazon must produce 500,000 signatures by September to get the initiative on the ballot next year. 

It will be very interesting to see how this process works. Amazon will undoubtedly get the 500,000 signatures and get the matter onto the ballot. What happens then should be fun to watch. Why? It is going to be a full on brawl. Wal-Mart will be trying to defeat the ballot while Amazon tries to support it. Sooner or later, other online and offline retailers will get involved. The money will be flowing and the accusations will get heated. 

What nobody knows is what the people will do. As far as I know, there has never really been a comprehensive study on what people actually think about this issue. Something tells me will have a pretty good idea by the end of 2012.