The Conflict: In June, the government of California passed a law requiring online retailers with offices or employees located in-state to collect sales tax. Seattle-based Amazon.com, which designed the Kindle in California, among other projects, called the law “unconstitutional and counterproductive,” offering to create more local distribution centres and jobs instead. Under the new law, Amazon would owe about $200 million in tax each year.
The Outcome: Amazon eventually said it would stop fighting the legislation after lawmakers agreed to give the company 12 months to begin collecting tax. Amazon plans to use the year to seek a “simple, nationwide system of state and local sales tax collection.” California assemblyman Charles Calderon agreed that a unified, national solution would be better for all.