As ThinkProgress has been reporting, online retailers across the country currently benefit from an “Amazon Tax Loophole,” which allows big online sellers like Amazon.com to avoid paying the same sales taxes as traditional retailers. This tax loophole is costly to state budgets. For example, in “2011 alone, Wisconsin will lose an estimated $127 million in uncollected sales tax on purchases made online.”
Lawmakers in California, which has cut more than $1 billion from the University of California and California State University systems to tackle deficits, moved to close this loophole yesterday. The California Assembly passed the final bill that would require online retailers to collect sales taxes just like traditional retailers:
The last of three bills aimed at getting the Seattle giant and other out-of-state online retailers to pay sales tax passed the Assembly on Wednesday afternoon. “It’s something we’ve been working on for years,” said Assemblywoman Nancy Skinner, D-Berkeley, who authored the bill. “But this is the first time that so many businesses up and down the state are supporting it.”
The passage of the legislation marks one of the first major victories for closing the online retailer loophole nationwide. Previously, the South Carolina Legislature was successfully bullied into approving the loophole, and Gov. Rick Perry (R-TX) vetoed legislation that would’ve closed the loophole in his state. The California bills will now go to the state Senate, which previously passed a different version, and then the bills will be sent to the desk of Gov. Jerry Brown (D). Amazon has previously threatened to cut all affiliate ties with the state if it closes the online sales tax loophole.