Tax & Accounting Blog

Amazon is taking its fight to the people of California, not the courts, to overturn new click-through nexus

Indirect Tax, Sales and Use Tax, Sales Tax Nexus July 12, 2011

Amazon wants California voters to strike down the new click-through nexus law.

Amazon filed a petition to get a measure on the California ballot to ask voters to repeal the new rule that requires all companies with in-state affiliates to collect sales tax.  The company has until September to gather 504,760 signatures to qualify the measure for a statewide election on February 7, 2012.

Since the new law’s effective date of July 1, Amazon has refused to collect the 7.25% state sales tax, claiming that the rule is unconstitutional.

Amazon challenged a similar law in New York on the basis that it was unconstitutional, but that suit has been tied up in the court system there since the law was enacted in 2008.  Amazon currently charges sales tax in New York.

Many observers expect a group of large brick-and-mortar retailers, such as Wal-Mart, Target and Best Buy to oppose the California referendum.