Amazon finds sales tax loophole
When California began discussing collecting sales tax from big online retailers, Amazon pushed back — and hard.
For a while, they made threats to cut ties with their California affiliates. But after years of battling it out with lawmakers in Sacramento, Amazon seemed to lose the fight last year when Gov. Brown signed a law that forces Amazon to collect sales tax by September.
However, that hasn’t stopped Amazon officials from scheming to weasel out of their responsibilities. And their latest tactic is a real rat-bastard sneaky one:
Bearing the promise of new jobs and economic growth, Amazon plans to build distribution centers in Patterson and San Bernandino. The catch? Building in these cities would potentially allow them to reclaim millions of dollars of what they pay into the state coffers.
Here’s how it would probably work. Amazon builds the distribution centers, pleasing city officials and giving them great economic news to tout in their re-election campaigns. In turn, said officials would be more than happy to return the economic favor by returning some of Amazon’s money back to them in the form of local sales tax sharing.
Theoretically, if a city wasn’t willing to kick back some of its own money, Amazon could build elsewhere.
According to Jim Morris, chief of staff to San Bernandino Mayor Patrick Morris, the Web retailer hasn’t made tax sharing a prerequisite for building the warehouse in their city.
But of course, Amazon officials wouldn’t explicitly say, “Hey, give me a tax incentive package or else.” No, they’d be more subtle, inquiring about the cities’ tax benefits with a wink and a nod.
Still, this wouldn’t be the first such agreement to exist in a California city. In fact, San Bernandino already has an arrangement with Kohl’s that kicks back 80% of their own sales tax to the company.
And as Morris put it, it’s all about the jobs — no matter what has to be done to get them:
“Bottom line, it’s of benefit for our people in a tight unemployment time.”