Executive Briefings

Amazon, Legislators Reach Deal Not to Collect E-Tail Taxes for at Least a Year

Amazon cut a deal with California politicians Sept. 7 to block the state's online sales-tax law for at least a year. The political deal buys Amazon and other online retailers a year's respite from the online tax in California. But it also effectively guarantees that, one way or another, all e-tailers will be collecting state sales tax 16 months from now.

Under the deal, Amazon and a coalition of brick-and-mortar retailers have until July 31, 2012, to lobby Congress to pass a bill authorizing states to collect online taxes. If the federal law passes, California won't require e-tailers to start collecting sales tax from customers in the state until January 2013. If Congress doesn't act, online tax collection will be required starting in September 2012.

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Amazon cut a deal with California politicians Sept. 7 to block the state's online sales-tax law for at least a year. The political deal buys Amazon and other online retailers a year's respite from the online tax in California. But it also effectively guarantees that, one way or another, all e-tailers will be collecting state sales tax 16 months from now.

Under the deal, Amazon and a coalition of brick-and-mortar retailers have until July 31, 2012, to lobby Congress to pass a bill authorizing states to collect online taxes. If the federal law passes, California won't require e-tailers to start collecting sales tax from customers in the state until January 2013. If Congress doesn't act, online tax collection will be required starting in September 2012.

Read Full Article