Amazon ups the ante in Internet sales tax fight

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Amazon.com Inc. is putting its money where its mouth is when it comes to trying to overturn a new California law that requires it and other Internet sellers to collect sales taxes on purchases by customers from the Golden State.

Late last week, the Seattle-based online retailer reported to the California secretary of state’s office that it had contributed $2.25 million to the ‘More Jobs Not Taxes’ campaign to qualify a referendum for the June primary election ballot. The contribution brought Amazon’s cumulative investment in the campaign since mid-July to $5.25 million.

The referendum, if signed by about 505,000 registered voters as expected, would ask voters if they want to uphold the law, which took effect July 1, or repeal it. Amazon is asking for a repeal, claiming that the California law is an unconstitutional interference with interstate commerce.

A spokesman for the Amazon-backed campaign, Ned Wigglesworth, declined to provide details of what the Amazon money is paying for. Those specifics will only become available when quarterly reports are filed Oct. 31.

However, it’s safe to say that much of the funds are being used to pay professional signature gatherers. They reportedly already are off the streets, having met their goal well before the Sept. 27 deadline for turning in filled petitions.

‘We’re confident we’re going to get them in before Sept. 27,’ Wigglesworth said. ‘The gathering is going well.’

Amazon’s fast work doesn’t surprise Becky Warren, a spokeswoman for the Main Street Fairness Coalition, an alliance of major retailers such as Wal-Mart Stores Inc. and independent store owners. The coalition members operate brick-and-mortar stores that collect California sales taxes. They complain that they face unfair competition from Amazon and other big Internet firms.

Requiring Internet sellers to collect sales taxes would put an estimated $317 million in new revenue into the coffers of California state and local governments, state financial experts said.

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-- Marc Lifsher