Amazon taking tax fight to California voters

Online retailers have fought efforts to collect sales taxes from them in legislatures and courtrooms, Josh Goodman reports at Now the giant among them, Amazon, it trying to get California voters to overturn that state’s new online levy.

Under a 1992 U.S. Supreme Court decision, state’s can’t charge sales tax unless a retailer has a physical presence in the state. Several states–including Connecticut and California–have tried to collect the tax by saying the partnership deals Amazon and other online companies have with smaller in-state firms constitute a physical presence; the online giants have countered by terminating the partnerships.

California, however, says Amazon still has a physical presence there in the form of a subsidiary that helped develop the Kindle, and therefor still must collect and remit sales tax. So Amazon has started a petition drive trying to get the state’s online tax law before voters in a referendum next year. It’s likely to be a close vote: A recent poll found that 46 percent of registered voters support the tax, while 49 percent are opposed.