Democratic lawmakers call Amazon jobs offer a political ploy
As the annual legislative session headed into its last four days, top Democrats denounced Internet retailer Amazon.com's offer to create thousands of new jobs if an effort to force it to collect sales tax on California purchases is postponed two years.
At a state Capitol news conference Tuesday, legislators and their brick-and-mortar-store allies cast doubt that Amazon would follow through with a promise to hire up to 7,000 people at two proposed California distribution centers. The company, which has a total workforce of 38,000, has made similar promises in other states that also are trying to force Amazon to collect sales taxes, they said.
"More jobs will ultimately be created in California when we have a tax system that is fairly and adequately applied to everyone in our state," said Assembly Speaker John Perez (D-Los Angeles). "And we're not going to allow the notion of jobs that may or may not materialize dictate our position on an issue of fundamental fairness to all businesses in California."
Amazon, said Assembly Rules Committee Chairman Nancy Skinner (D-Berkeley), is "cynically promising jobs that aren't going to materialize."
California has lost about 18,000 jobs because of unfair competition from Amazon and other Internet sellers that don't pay sales tax and offer lower prices, said Bill Dombrowski, president of the California Retailers Assn. Many more jobs will disappear in coming years if Amazon retains an unfair competitive advantage, he said.
A spokesman for Amazon's "More Jobs Not Taxes" campaign, which is gathering signatures to try to repeal a new California Internet sales tax law, did not respond to requests for comment on the criticism. The company has refused to comply with a California sales tax collection law that took effect July 1, calling it unconstitutional.
The Amazon-backed campaign, however, is close to turning in enough signatures on referendum petitions to qualify for the June 2012 ballot.
In the meantime, Democrats in both the Senate and Assembly and dozens of lobbyists hired by big-box retailers are working overtime to convince a handful of Republican members to vote for a bill that would nullify the Amazon referendum if signed into law by the governor.
The Democrats need bipartisan support from at least two-thirds of the membership of the two houses.
"I think we're close on the votes," said Assemblyman Charles Calderon (D-Whittier). A first attempt to find the needed votes could happen as early as today, he said. If the votes aren't there initially, more attempts will be made before the scheduled midnight Friday legislative recess.
Meanwhile, a trade group that represents Internet site operators, who previously earned commissions from Amazon, complained that they are having a hard time surviving since Amazon cancelled their contracts rather than follow the new California law.
Keeping the so-called affiliates would have made Amazon directly liable to collect sales taxes under the California statute.
According to a survey conducted by the Performance Marketing Assn., 37% of such affiliates have lost more than half of their income; 22% went out of business and 32% said they have left or are planning to leave California.
Photo: Amazon distribution center in Phoenix. Credit: Ross D. Franklin/Associated Press
-- Marc Lifsher