Amazon, other online retailers receive compromise with California

A bill that delays requiring online retailers such as Amazon to charge California sales tax for one year will go to Gov. Jerry Brown’s desk for his signature after the legislature passed it on Friday.

Without AB 155 — also known as the “compromise bill” or the “Amazon deal” — stopping the collection of sales tax, California would have earned $200 million in tax revenue. The new bill states that online retailers have until September 2012 before starting to collect the state’s nearly 10 percent tax from its customers.

“This legislation will allow us to continue to work with Congress and the states to obtain a federal resolution to the sales tax issue as soon as possible,” Amazon’s vice-president of global public policy, Paul Misener, told the Register.

Any national law enacted before next September would supersede California’s current deal with Amazon.

The sales tax collection by online retailers with a physical presence in California was set to go into effect this past July after legislation from Sacramento, but Amazon created a petition in the hopes that voters would overturn the new law.

In exchange for a deal, Amazon has offered to create more jobs in California by building new distribution centers. The current AB 155 has no such measures yet.