Amazon.com has promised to create 7,000 jobs in California if state leaders put a recently enacted online sales tax on hold for two years.
Starting July 1, the state began requiring out-of-state retailers to collect sales tax on online orders made through California-based affiliates. In addition to creating new jobs in the company's distribution centers, if the law is not enforced until 2014, the world's largest internet retailer said it would drop its effort to put a measure out to California voters that would repeal it.
At 12 percent, California currently has the second-highest unemployment rate in the nation, according to the U.S. Bureau of Labor Statistics.
The details of Amazon's offer emerged after a Thursday meeting between company representatives, members of the California Retailers Association and a group of senate Republicans, Reuters reports. The retailing group is opposed to the deal while the state's Democratic lawmakers have also refused the offer, due to the dire need for new sources of revenue in the state.
Lawmakers have largely supported the online sales tax, which has also received the approval of a number of large and small businesses, the news wire reports. Bill Dombrowski, the president of the California Retailers Association, told the source that retailers in the state have often complained that they are disadvantaged by having to collect sales taxes while out-of-state businesses do not have to.
Our people came back and said this isn't legitimate, he said. It's unacceptable.
For his part, Assemblyman Charles Calderon, the author of the sales tax measure, told the Bay Area News Group that he didn't think Amazon's offer could be trusted.
I don't think Amazon's offer has legs. This offer is perceived more as a tactic. The longer they can keep stakeholders talking about another bill, the more the clock winds down [on the bill], he said.
Although Gov. Jerry Brown said he has not seen Amazon's proposal, he said it is unlikely that he would support the deal.
Calderon and other lawmakers are seeking a two-thirds vote on the bill to prevent Amazon's potential referendum.
I would be concerned about anything that would reduce revenues going forward because of the very uncertain economy, Brown said after speaking at a California Department of Corrections and Rehabilitation conference on Thursday.
Forecasters predict California's unemployment levels will remain in the double-digits through next year. Last week, Brown, along with Assembly Speaker John Perez and Senate President Darrell Steinberg, unveiled proposals for tax breaks for businesses, in the hopes of creating a more accommodating climate for job creation.