AMAZON REFUSES TO PAY TAXES IN CALIFORNIA

Amazon refuses to pay its share, issues threats
From its base in Seattle, Amazon is threatening the livelihoods of 10,000 California affiliates if legislators proceed with efforts to force Amazon to collect sales taxes from its customers, something it should have been doing for years.

Amazon affiliates place Amazon ads on their websites in exchange for payments when visitors click on the ads. With its threat, Amazon proposes to further damage California by removing a revenue source from this state's businesses.

Paul Misener, Amazon's vice president for global public policy, issued the warning in a letter last week to the California Board of Equalization. The world's largest online retailer has made similar threats in other states that have challenged its refusal to collect sales taxes.

Amazon's business model is based on evading sales taxes in states that charge them, California included. By refusing to collect sales taxes from its customers, Amazon undercuts California retailers, particularly booksellers, who abide by the law and collect sales taxes.

Responsible lawmakers have grown impatient with Amazon's obstinacy, especially now as they face the ugly prospect of erasing a $26.6 billion deficit by slashing funding for services to infirm elderly people, California's public colleges, state parks and much more.

Uncollected sales taxes from online sales in California could exceed $300 million a year.

As Amazon's hometown paper, the Seattle Times, opined last week: "Amazon is a giant. It has helped drive hundreds, and maybe thousands, of bookstores out of business. The Internet retail industry already has a cost-of-real-estate advantage over free-standing stores. It should not have a tax advantage as well. …

"We have said it before and will say it again: Amazon will have to pay. Someone will twist this company's arm. Maybe it will be California, maybe it will be Texas, maybe it will be all the states and maybe it will be the federal government. It will happen, and Amazon will survive it."

Other retail companies such as Sears that have an online presence and meet their obligation to collect sales taxes have been quick to try to lure Amazon's affiliates. Good for them.

Amazon has been a stunning success. It has offered consumers convenience and low prices. Its profits have soared in no small part because of the lucrative California market.

But it is squandering its goodwill. Californians who pay college tuition, have a kid in public schools, use a park, appreciate having cops on the beat, or have a family member with a disability ought to think twice about patronizing a company that is steadfast in its refusal to meet this basic obligation.