California Booby-Traps Amazon's Drive Against 'Internet Sales Tax' at Final Hour

Amazon.com didn't stand a chance against the power-hungry California Legislature.

In the war between state politicians and the Internet's most popular one-stop shop, the former has thrown a last-second curveball that might derail Amazon's (and no doubt many voters') wants to strike down California's brand-new Internet sales tax.

As soon as the sales tax (AB 28X) passed into law on July 1, Amazon protested the most painful way it knew how:

It cut ties with about 10,000 California business partners.

And soon after, the big guns: The megastore effortlessly gathered signatures for a referendum that would strike down the law, set to go on the ballot next June. And the outcome of such a vote is obvious: What Joe Sixpack in his right mind would want to pay extra for his 2 a.m. Internet impulse buys?

However, as of a sneaky Thursday move by the Senate Appropriations Committee, it looks like California lawmakers may be holding the bigger guns in this battle: sneaky loophole knowhow in the state's convoluted lawmaking system.

A clip from today's Los Angeles Times piece:

In a bit of legislative legerdemain, the state Senate Appropriations Committee took the language of that law, tweaked it and put it into a so-called urgency bill.

As an urgency bill, the legislation, should it pass, would nullify the existing law, invalidating Amazon's voter petition, and the new law would be immune from a referendum.

The Times writes that Amazon won't comment, "apparently blindsided by the maneuver."

We would be, too. Not only would this sneak re-write of the Internet sales-tax law invalidate Amazon's petition -- if approved by the Senate, Assembly and Governor, many of whom have made their anti-Amazon positions clear -- but the way committee members just redrafted the bill will rid the online giant of some much-needed allies.

Now, instead of taxing Internet companies who make over $500,000 per year, the government says it will only tax those who make over $1 million per year.

This has already caused eBay to drop out of the resistance movement, reports the Times, and skeptical Republicans are being steadily lobbied by small-business advocates like the Los Angeles Chamber of Commerce.

So who'll win this economic war? It's hard to say: The California affiliates Amazon dropped in June might still be too butthurt to follow the mother ship's rally cry. And then there's the rest of California, uninvested in the issue aside from the fact that we'd rather not pay any more for our motivational books on tape than we already (embarrassingly) have to.

May the best conniving five-year-old win.

[@simone_electra/swilson@laweekly.com]


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