Settlement of Amazon War Could Lead to Budget Trigger

You may have heard of the Amazon War regarding the state budget. Technically, when you buy on line, you owe sales tax to the state. But websites such as Amazon leave it to you to pay. And you don't. As part of the recent state budget, an attempt was made to force Amazon and other sites to collect the tax due to the state. Amazon dumped a lot of money into an initiative campaign to reverse the budget deal on the sales tax. (There are some legal questions about such an initiative and in any case the legislature then tried and failed to modify the bill to make it initiative-proof.) This is a high stakes battle which involves retailers such as Wal-Mart, which have to pay the tax, on the opposite side from Amazon.

There are reports of a deal that would end the War. No tax would be collected for a year and some arrangement – nationally – would be worked out between brick-and-mortar retailers such as Wal-Mart and Amazon concerning sales taxes and online sellers. However, the deal chops $200 million from the current state budget that is not going to be collected. That revenue gap brings us closer to the pulling of the budget trigger that would cut the UC budget further.

See http://blogs.sacbee.com/capitolalertlatest/2011/09/amazon-agrees-to-begin-collect.html

For more on the Amazon War: