Coalition of nonprofits calls for boycott of Amazon until it stops resisting California law requiring online retailers to charge state sales tax; Amazon has already spent US$3M on referendum to repeal law

Lorena Madrigal

SACRAMENTO, California , August 16, 2011 (Associated Press) – A coalition of nonprofit groups is calling on customers of Amazon.com Inc. to cancel their accounts unless the Internet retailer stops resisting a California law that requires more online retailers to charge a state sales tax.

The nonprofits along with several state lawmakers Monday called on Amazon to "stop cheating California" by trying to repeal the law through a ballot referendum.

Amazon's opponents held a news conference outside the Capitol announcing a new website - ThinkBeforeYouClickCA.org - that is intended to organize opposition to Amazon and explain how customers can close their accounts.

Amazon.com Inc. ( AMZN) did not immediately respond to an email and a call for comment Monday.

Lawmakers in June approved a measure to expand collection of California sales tax to more Internet retailers, estimating it would bring in at least $200 million a year.

Amazon has spent $3 million on the referendum to repeal that law so far.

The coalition combines groups supporting increased funding for health and social services, which have been cut deeply by the state in the last several budgets. They contend that by avoiding collection of the state sales and use tax, Amazon gains a competitive advantage over businesses based in California and deprives the state of revenue that could go to help seniors, working families and the disabled.

The tax revenue that Amazon could collect could restore home assistance for disabled Californians that help them go to work rather than languish in expensive nursing homes, said Jessica Lehman, representing Community Resources for Independent Living.

"If Amazon.com won't contribute to California, then we won't contribute to Amazon," she said.

Other groups calling for the boycott included the California Alliance for Retired Americans, the Health and Human Services Network of California and Parent Voices.

Representatives of the groups were joined by three Democratic lawmakers - Sen. Loni Hancock and Assemblywoman Nancy Skinner of Berkeley, and Assemblyman Charles Calderon of Whittier - who introduced bills expanding the online tax collection rules. The bills were combined into a single measure that was passed as part of the 2011-2012 budget.

"Think before you click that mouse to buy anything from Amazon," Calderon said.

Federal law allows states to require out-of-state businesses to collect the existing state tax on sales if they have a physical presence in the state, such as a store. The new California law expands the definition of physical presence to include marketing affiliates and sister companies. Proponents say Amazon has related companies in California that fall under the new law.

Amazon cut off its contracts with affiliates in California after the change was signed into law and has not collected the tax from customers. The California Attorney General's office on July 18 gave backers approval to begin collecting the 505,000 signatures it would need to place a referendum on the ballot next year to reverse the law.

At least six states have approved laws targeting Amazon and other online retailers that don't collect sales tax, and more were weighing such measures this year.

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