Amazon spends $5.25m in tax law fight

When it comes to avoiding the requirement of collecting sales tax from its consumers, Amazon is not afraid to open its wallet, reveals The New York Times.

More than nine months before a proposed June 2012 referendum asking that California's new Internet sales tax law be overturned, Amazon, the Seattle-based online retailer, has already spent $5.25 million, state records show, more than any company has spent in California this far from a vote in at least a decade.

“The initiative and referendum process have been hijacked,” said Loni Hancock, a state senator from Berkeley, who wrote the law Amazon is trying to overturn and who is now pushing legislation that could block Amazon's referendum effort.

In California, voters could decide if Amazon will have to collect sales tax in a June 2012 referendum, writes News Channel 5.com.

According to The Bay Citizen, Ned Wigglesworth, spokesman for the 'More Jobs Not Taxes' committee, which is running the repeal campaign, would say only that Amazon's second multimillion-dollar contribution in as many months was necessary, “to cover costs associated with the first phase of the campaign.”

Wigglesworth said his committee was working with a “growing coalition of taxpayer groups, consumers, small businesses” to overturn the new online sales tax law - although so far state records show Amazon to be its only contributor.

Internet merchants may be coming to the end of an era in selling products without collecting sales taxes, says analyst Ray Valdes at the research firm Gartner in San Jose.

“Online retailers have to deal with the messy and very real world of politics and tight budgets and economic realities,” Valdes said.