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California accepts a deal. Maybe.

Agreement between the state's legislative leaders and Amazon would delay internet tax collection until Sept. 2012

Rich Pedroncelli/AP
Bill Dombrowksi, President and CEO of the California Retailers Assocciation, joined Assembly members Charles Calderon and Nancy Skinner in calling on lawmakers to reject a proposal by Amazon to grant the internet giant a two-year exemption from collecting sales tax, during a news conference in Sacramento, Calif. Amazon has proposed that in exchange for the two-year reprieve from having to collect sales tax, it would build new facilities in California that could employ as many as 7,000 people.

Legislative leaders in California, big box stores, and Amazon have reached an agreement to delay internet tax collection until September 2012. There is no word on whether Governor Jerry Brown will support the plan and no mention of whether the 7,000 distribution center jobs Amazon previously offered the state is part of the package. Amazon did agree to stop supporting a repeal referendum and will join other retailers in pushing Congress to enact an internet sales tax law applying to all 50 states and the District of Columbia.

In a landmark 1992 ruling governing collection of sales taxes by remote sellers (they were mail-order firms then), the U.S. Supreme practically begged Congress to resolve the mess by enacting national standards. But Congress never acted, and given how quickly legislation gets through Congress these days, that’s not likely to happen any time soon.

Nonetheless, Amazon promises to start collecting the tax in September 2012 if Congress fails to act. It will be interesting to see whether that really happens.

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