Amazon to California: Put up your dukes

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July 14, 2011

Bob Blumenfield, state legislative sponsor of ABx1 28

SACRAMENTO, California: Online retailing giant has announced that it intends to lead a fight to repeal a tax that Gov. Jerry Brown signed on June 28. ABx1 28, the law is targeting for repeal using California's veto referendum process, requires Internet retailers to pay sales tax if they have affiliates or subsidiaries in California.[1]

The new tax is expected to cost Amazon $83 million in additional taxes in 2011 and to overall generate about $200 million in additional tax revenue for the state.[1][2] has made it clear that they plan to directly lead the fight to overturn ABx1 28.[3] Paul Misener, an Amazon vice-president, says, "This is a referendum on jobs and investment in California. As Governor Brown has made clear, it is important to directly involve the citizens of California in key issues and we believe that Californians will want to vote to protect small business and keep jobs in the state."[4]

Meanwhile, commercial interests with physical locations in California who already pay sales tax, such as Wal-Nurt and Target, say they will fight Amazon's effort to overturn ABx1 #28 because in their view, the fact that Amazon doesn't have to charge sales tax on the products it sells online, while they do have to charge sales tax to customers when they sell the same item, gives Amazon (and other online retailers) an unfair advantage.[1]

ABx1 #28, the law Amazon seeks to overturn, was sponsored by Bob Blumenfield.[5]

Sponsors of 11-0019 must collect 504,760 signatures within 90 days of receiving a ballot title on the measure.[3]

A letter requesting a title and summary for the proposed referendum was signed by Charles T. Halnan , and was received by the Attorney General of California's office on July 8, 2011.[6] The attorney general's office will supply the required ballot title and summary by July 18. At that time, supporters of the referendum may then begin collecting signatures to qualify the measure for the ballot.


As the battle over ABx1 #28 moves into high gear, Dan Schnur, who directs the Unruh Institute of Politics at the University of Southern California, predicts that it is just the beginning of an expected wave of tax-related measures aspiring for a spot on California's 2012 ballot. He says, "The thing about tax initiatives is that they spawn. One tax measure begets another."[7]

Bill Whalen, a fellow at the Hoover Institution, agrees: "2012 is shaping up as a potentially enormous year in terms of ballot fights. You could have a very crowded ballot."[7]

That potentially crowded ballot may include an entry from the California Federation of Teachers. They'd like the state to increase the income tax rate charged to its wealthier residents: "We're fairly confident that we'll be able to build a coalition that will ask the richest Californians to return to higher tax rates."[7]

See also