Amazon offers to build facilities in bid to end sales tax fight

The Internet giant proposes investing up to $500 million in at least two new distribution centers and hiring as many as 7,000 workers if California lawmakers temporarily stop trying to force the retailer to collect state sales tax.

By Marc Lifsher

Amazon.com Inc. is offering to build at least two distribution centers and hire as many as 7,000 workers if lawmakers back away — at least temporarily — from trying to force the Internet giant to collect sales taxes on purchases made by California customers.

The proposal, along with promises to invest as much as $500 million in the new facilities, was made in the form of draft legislation at a meeting Tuesday night between Amazon lobbyists and representatives of companies that belong to the California Retailers Assn.

The retailers trade group and other supporters of California’s effort to collect more than $300 million a year in unpaid taxes on Internet sales dismissed the Amazon compromise as a ploy.

“The so-called deal that Amazon has proposed is not serious,” said Bill Dombrowski, president of the retailers group. Lenny Goldberg of the California Tax Reform Assn. called it “a totally cynical maneuver that’s part of the game that they try to play in every state.”

According to an informal memo obtained by The Times, Amazon wants the state Legislature to repeal a law that took effect July 1. The statute requires Amazon and other out-of-state Internet sellers to collect California sales taxes.

Amazon, so far, has said it would not collect the taxes and has spent more than $5 million on a referendum campaign that would ask voters to rescind the law.

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