Local politicians advocate for boycott of Amazon

Two local legislators joined advocacy groups in Sacramento Monday to boycott Amazon due to the company’s effort to overturn a law requiring online retailers to collect state and local sales tax from their customers.

State Senator Loni Hancock, D-Berkeley, and state Assemblymember Nancy Skinner, D-Berkeley, teamed up with state advocacy groups who claim that Amazon and some other online companies have refused to collect these taxes from their customers, which could result in $200 million to $500 million in lost state tax revenue this year.

These funds could be used to help address the state budget crisis, rather than cutting social services and increasing public university fees, Skinner said.

“Up and down California, the majority of businesses pay sales tax, but it is Amazon that wants a different business model,” Skinner said. “(Amazon) refuses to pay this sales tax, and this is creating an unfair competitive advantage.”

Representatives from Amazon could not be reached for comment as of press time.

Jean Ross, executive director of the non-partisan California Budget Project, said that the company’s refusal to collect sales tax could also indirectly result in increased student fees.

“Every time a student buys a textbook from Amazon, Amazon’s not sending that tax to the state, which results in the rising student fees,” Ross said.

Ross added that even if Amazon does not collect these taxes, consumers must still pay this tax to the state.

“The key point for people to understand is that regardless of what Amazon decides to do in California, California consumers still owe that money to the state,” Ross said. “It is not a new tax — it is a new way of collecting a tax that (consumers) always owed.”

Ross said that typically, non-online businesses collect sales tax from their consumers, but before AB 28X was signed into law in June, Amazon employed a business model that did not require them to collect tax from their consumers.

“When you buy from Amazon, they  … will admit that the consumer will need to send it to the state,” Ross said. “They have built a business model on the assumption that most consumers won’t pay their user tax when they file their income tax.”

This advantage unfairly shifts consumers toward Amazon and away from local businesses, said Robert Blanco, a legislative aide to Hancock.

“What is happening up and down California is that businesses that pay state taxes are just becoming show rooms for Amazon,” Blanco said. “For example, (consumers) try all these different cameras at their local store and go home to just order it online.”

However, Ned Wigglesworth, a spokesperson for More Jobs Not Taxes, said the political committee is currently trying to collect more than 500,000 signatures by Sept. 27 for a ballot initiative to allow voters to approve or reject the law on the June 2012 ballot.

“The reasons that we are opposed to this new law is it hurts consumers, it hurts small businesses, it destroys jobs, when we need them for economic recovery,” Wigglesworth said.

But Nancy Berlin, the executive director of California Partnership — an advocacy group that was present at the boycott — said that this tax revenue could be used to fund needed social services such as day care centers and vision services.

“I know that $200 million is not a huge number in the state budget, but it is significant,” Berlin said. “Adult day care centers that have been closed, children who are losing vision care — we are talking about families who are losing basic benefits. The least we can do is collect this revenue that we should already be collecting.”

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  • http://profiles.yahoo.com/u/FDGYHBEWVNGUG763L5X4TON3JQ Nazani14

    For pity’s sake, please don’t boycott ALL Amazon purchases. Like
    thousands of small book dealers I rely on sales through the Amazon
    platform for the income that pays for my health insurance and other
    essentials. All the students trying to recoup some of the outrageous
    cost of their textbooks, all of the artisans that sell their wares on
    Amazon- they are NOT responsible for the actions of the corporation.  I pay tax for my online sales in VA, where I live. 
    Just don’t buy items that are packed by Amazon, instead of being shipped
    directly from the independent vendors. We really have no other
    comparable sales platform to turn to, and the public would never find
    our wares on small websites.  I can’t live without this income.   Literally.

  • Guest

    Simple solution: why not get rid of the sales tax entirely?  It’s extremely regressive, difficult to collect, and just plain pointless.  Raising income and property taxes would make far more sense than going after Amazon.

    • Perspective

      Except Proposition 13 effectively prevent’s the state or local governments from raising property taxes.

  • californian

    These guys are such complete idiots.  We should start a petition to get the out of office.

  • Anonymous

    Libs are clueless. Spend,tax,repeat. They have created a cadre of dependent adult children. Cali is in the death spiral. Vote all Libs out.

  • 2001flht

    Lame. Castigating amazon, while tossing in the occassional inflammatory an untruthful impact statement, is a diversionary tactic to keep people from boycotting the real problem: uncontrolled spending by a majority legislature beholden only to their special interests.

    This state’s spending has exceeded its income for years, and will continue to do so as long as we give corporate tax breaks to multi billion dollars companies, provide redundant services to the same constituency just so a legislator can have their name on the legislation, and raise taxes on purchases, home ownership, and services so we can “justify” social program expansion rather than spending only what we have, investing in infrastructure (like transportation), and attracting businesses through a simplified regulatory and tax structure.

    Amazon is not the problem.

    • Dennisp777

      Amen……. you hit the nail on the head. If only Sacramento would get the picture.