Russell Nichols is a GOVERNING staff writer.E-mail: email@example.com
The brutal funding cuts suffered by nonprofits in California might have been avoided if Amazon had paid its $200 million share of internet sales taxes to the state. That’s the argument from a coalition of advocates for the poor and elderly, who are calling for Californians to boycott the mammoth online retailer for not collecting taxes.
To organize the opposition and urge users to cancel their accounts, nonprofits came together to launch ThinkBeforeYouClickCA.org. "We don't have the kind of money and power Amazon does, but collectively we're asking our people and others in our community who share our values to put their money where their values are," said Nancy Berlin, director of the California Partnership, to the Sacramento Bee.
In the past, online sellers like Amazon didn’t have to collect state sales tax because the Supreme Court ruled that a business without a physical presence in the state was exempt. California loses about $1 billion a year in sales taxes from online purchases, according to a state tax collection agency, the Board of Equalization. But tides changed in June when Gov. Jerry Brown and lawmakers ordered Amazon to start collecting as part of the budget deal. Of course, Amazon wasn’t sold on the idea. Since the law took effect on July 1, the Seattle-based company has not collected sales tax. Amazon stopped its relationship with California affiliates and spent $3 million last month to collect signatures to repeal the law.
The U.S. Supreme Court has ruled that such tax laws, like California's in this case, are unconstitutional, according to Ned Wigglesworth, a spokesman for the More Jobs Not Taxes committee. “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 told the Daily Californian.
This debate has been playing out across the country. Per the Huffington Post:
Over the past few years, a number of states have proposed or passed internet sales tax legislation, often termed by the media as 'Amazon laws.' The result has been that Amazon has either closed operations, severed affiliate relationships, or not built promised distribution centers, in those states, putting hundreds of people out of work. This has happened in Texas, Colorado, North Carolina and Rhode Island, among others, with The Memphis Business Journal reporting that Tennessee may introduce its own internet sales tax by the end of the year.
According to BigGovernment.com, online businesses are leaving California as a result of the new law, which might negatively affect the state’s tax revenue. But according to the Think Before You Click campaign, online retailers are cheating the system and shouldn’t be allowed to ignore the law, especially as millions of dollars for health, welfare, education and other social programs have disappeared.
Do you support the efforts to boycott Amazon? Let me know in the comments.
Written and compiled by staff writers and editors, GOVERNING View is an on-the-ground, and sometimes behind-the-scenes, look at the topics we're covering in print and online. From notes on what's up in statehouses, county courthouses and city halls, to encounters with people, places and things, GOVERNING View is a window into the side of state and local government you don't always see.