STOCKTON -- Merchants banding together to hype the virtues of a state sales tax might seem a bit odd, but the small-business owners and their supporters who conducted a Pacific Avenue news conference Aug. 16 had one goal in mind: shine a bright light on Amazon.com's refusal to comply with California's e-fairness law.
And to let the public know how the Seattle-based company is hurting them and California's public institutions.
Local merchants collect sales tax from their customers and pass it along to the state to help fund local schools, public safety and other government operations. That's something Amazon is refusing to do when it makes an online sale to a customer in California, according to the broad statewide coalition under the banner of Stand With Main Street that includes mom-and-pop businesses, chambers of commerce, major national department and warehouse stores, public employee unions and government officials.
This is not a new tax being proposed or increased. It's the same retail sales tax that California businesses have levied on purchases for decades, the coalition members emphasize.
"I've collected thousands and thousands of dollars in sales tax. Anybody who sells to the same consumer I sell to should be required to collect that tax as well," said business owner Jonise Oliva, who hosted the news conference in her north Stockton art and framing shop, Deck the Walls.
Many of those banded together at the conference were members of the San Joaquin Hispanic Chamber of Commerce, including Oliva, who is president of the organization.
"We spent thousands of dollars setting up a storefront. I've been competing with the Internet since its inception," said Oliva, directing her anger specifically at Amazon.
Amazon believes the new state law, ABX128, which orders California consumers to pay taxes on Internet purchases at the time of checkout, is a job killer, a disincentive to investment and -- bottom line -- unconstitutional.
"The state Legislature passed the new Internet tax law despite clear U.S. Supreme Court precedent holding such laws unconstitutional, putting taxpayers and California jobs and investment at risk. As intended, this law would hurt consumers at a time they can't afford to send more tax dollars to Sacramento and kill jobs when we need them for our economic recovery," said Ned Wigglesworth, spokesman for Sacramento-based More Jobs Not Taxes, whose primary funding comes from Amazon.
Each side accuses the other of unbalancing the playing field for small businesses.
"This tax law creates an uneven playing field for small online businesses in California who would be at a big disadvantage to online businesses in other states," said Marc Duerr of the California Business Alliance in a prepared statement supporting Amazon's stance.
Mark Martínez, a small business owner in Stockton and chief executive officer of the San Joaquín County Hispanic Chamber of Commerce, who spoke at Tuesday's news conference, saw it another way.
"Normally, we're not in favor of new business taxes. This is not a new tax. The Legislature simply set out to collect a tax from online retailers such as Amazon. It's important to make sure everyone complies with the law and plays by the same rules," Martínez said.
Ellen Old, a longtime educator and president of the Stockton Teachers Association, gave her organization's support to local merchants who collect sales tax from their customers and pass it along to the state to help fund local schools, public safety and other government operations.
"We need to name them and shame them," she said.
Old, with the Stockton teachers union, said Amazon's refusal to collect sales tax in California is "undermining public education and lots of other public services in California. Amazon in particular is a particularly egregious example -- they sell books.
We are supporting the next generation of readers for them, and we are losing hundreds of millions of dollars in revenue."
The state has estimated it loses up to $300 million annually in uncollected sales taxes from online retailers, according to the Main Street coalition that includes such well-known retailers as Walmart, Safeway, Target, Sears, The Home Depot, Best Buy, J.C. Penney and Barnes & Noble, as well as the League of California Cities, California Business Properties Association, California Retailers Association, California School Employees Association, Service Employees International Union and the Greater Stockton Chamber of Commerce.
The More Jobs Not Taxes coalition is confident of qualifying a referendum for the June 2012 ballot seeking to overturn the online sales tax measure.
In a July USC/Los Angeles Times Poll, the question was put to voter specifically naming Amazon as the target of state enforcement of the law requiring some out-of-state online retailers to begin collecting sales tax from California customers. Those polled opposed enforcement 51 percent to 45 percent.
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