East Bay retailers finally will achieve a level playing field with online behemoth Amazon.com on Saturday, when online sites begin collecting sales tax from California customers.
It's a victory more than a decade in the making for local brick-and-mortar shop owners, who for years have been educating consumers about products they later buy online to avoid paying sales tax. For California and its cities and counties, the reward will be $300 million in new revenue to help close the chronic budget deficit that forces service cuts each year.
Gov. Jerry Brown should take a bow. With the help of the Legislature, he forced Amazon to the negotiating table last fall and called the online bully's bluff when it threatened to abandon its 10,000 California affiliates, as it did in other states that had the temerity to pass online tax laws.
Now Amazon.com is supporting San Mateo Rep. Jackie Speier's legislation before Congress to allow every state to collect sales taxes on all online purchases. This was part of the California deal. A national solution will be far better than the state-by-state laws that have advanced in fits and starts, ultimately forcing Congress to act.
Speier's legislation is getting bipartisan support. Tennessee Gov. Bill Haslam is the latest Republican to jump on board, pointing out that this is not a new tax. Buyers were supposed to be paying it on their own all along.
Twenty years ago, when e-commerce burst onto the scene, states didn't care whether they collected sales tax on it. Even in the late 1990s, when Amazon was taking in a paltry $150 million a year, the state was happy to support a new industry. Besides, back then there was no simple way for online retailers to calculate the sales tax for buyers in different cities and states.
Now the technological problem has been solved, and Amazon took in more than $34 billion in 2010. It doesn't deserve the nearly 10 percent edge on price it has over local retailers in California. It's local stores that tend to support schools and other local causes, including the benefit of being able to actually see products before buying.
Last year, Brown pushed for the law to make major online retailers collect taxes. When Amazon threatened to take its marbles and go elsewhere, the governor held his ground, knowing the company needed California's business. They struck a deal last fall, granting a one-year online sales tax moratorium in exchange for Amazon agreeing not to pursue a referendum to get its way. The upshot is increased revenue and some new jobs. As part of the agreement, California opened the way for Amazon to build two huge warehouses in Patterson and San Bernardino that will employ nearly 2,000 people.
California stood up for local businesses and struck a deal that's fair to everyone. In today's my-way-or-the-highway political environment, it's a refreshing reminder of the way government used to work.