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Is Amazon's Referendum Constitutional?

by: Brian Leubitz

Fri Jul 15, 2011 at 12:00:00 PM PDT


Amazon wants to overturn rules requiring they collect sales taxes, but is it possible through referendum?

by Brian Leubitz

The following provision of the California Constitution will get much scrutiny over the next few weeks (and months) as Amazon seeks to overturn the requirement that they collect sales taxes:

SEC. 9.  (a) The referendum is the power of the electors to approve
or reject statutes or parts of statutes except urgency statutes,
statutes calling elections, and statutes providing for tax levies or
appropriations for usual current expenses of the State.

That's from Article II of the California Constitution.  While a quick reading would indicate that Amazon could not, in fact, put the tax statute to a referendum, quick readings don't always win the day.  And while Amazon's attorney, Steve Merksamer, spouts off about how the right to referendum is "sacrosanct," it isn't quite that simple either.

The measure is now in the capable hands of Attorney General Kamala Harris, who will determine whether it can proceed to the signature gathering phase.  If she determines that it is not a valid referendum, then Amazon will likely sue.  If she finds it is valid, well, expect a suit in the opposite direction, after all these are some high stakes:

Whichever way she rules, the losing side could end up suing.

"I'm sure there will be litigation on this," said Assembly Majority Leader Charles Calderon, D-Whittier.

Calderon, Assemblywoman Nancy Skinner and several area retailers crowded into Swanberg's on J, a small midtown clothier that specializes in Hawaiian shirts, to blast Amazon's sales tax stance. By not collecting the tax, Amazon is harming brick-and-mortar retailers, they said.

"It's a fairly big issue," said Swanberg's owner Lauren Lundsten, wearing shorts and a Hawaiian shirt.(SacBee)

The automatic 9% discount that Amazon gets is made any more fair through all of their machinations.  They've blocked other avenues to charge sales tax on their products, so what choice is left?

We should hear sometime soon from the AG's office, and then shortly thereafter in the courts.  But this is not a battle that should have to be fought for the sake of an unfair advantage for an out-of-state corporation.

Brian Leubitz :: Is Amazon's Referendum Constitutional?
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So how did Prop 13 pass muster? (5.00 / 1)


I have No idea, Lunatics it seems can do a lot. n/t (0.00 / 0)


[ Parent ]
This is a vote on an enacted law (0.00 / 0)
The rule is signatures can be collected to vote up or down on a law passed by the legislature.  This way the initiative sponsors don't have to write any new law, they just reject one that was already passed.

An initiative statute or initiative constitutional amendment can cover any subject.  If these people lose on the decision by Kamala Harris, they could just write a new initiative banning taxes of internet sales, and then go get signatures.  But their lawyers wouldn't make much money doing that...


[ Parent ]
Sales tax rule good, but won't change preference for online shopping (6.50 / 4)
I support the idea of taxing online sales, but I do wish they'd stop using the argument that Amazon and other online retailers are harming brick-and-mortar retailers.

I don't shop at Amazon to avoid sales tax. I shop there because they have things I want, including specialized book and video titles I can't get at Borders or Barnes and Noble. I can download books for my Kindle, which again--there's no brick-and-mortar store from which I can do that. The same with things like my City of Heroes game subscription; I deal directly with NCSoft, and download new content from them.

I also use Amazon because it means I don't have to go out of my house, and deal with the hell that is Fry's on Saturday. The only thing that would get me to choose to go to a brick-and-mortar store would be to comepletely change the shopping experience.

So yes, Amazon is getting an unfair advantage with the sales tax issue, but I don't think that's key to why people shop online.


IAWTP (4.00 / 1)
The shopping experience in person is not an enjoyable one -- I learn about products by doing research on line because getting any useful information at a brick & mortar store is hit or miss at best.  I can do my research at 4AM if I want, as well -- and complete the purchase at that time.

[ Parent ]
Most (4.00 / 1)
Of what I buy online, like eggs or a TV Lamp(once every 2 years) or various PC Parts(new or maybe used) can't be bought locally, I'd rather buy from Amazon or somewhere else, I'm not going to special order any of it or stand inline, But then standing for more then a couple of minutes is painful, So I'll pass. I'm sure not going to a local bookstore to buy an out of print used book that isn't in stock and driving all over creation in a car with broken a/c isn't fun, So I'll pass. As to paying sales/use tax in a tax return, forget that, SSA won't let Me file, so that's out. Besides I'd just be rebating part of My check back to the state coffers and they have taken enough out of My check already(2009=$907.00, 2011=$830.40), If I have to pay cause the place is in CA and their the lowest price with shipping and tax, then I'll pay, out of state retailers do not have to obey CA law as they reside out of state, beyond the CA state borders where CA laws end, Now if an out of state retailer has a physical retail presence where they sell stuff at then they should charge sales/use tax, Amazon makes kindles in CA and has a server in CA, Just no Retail, so No sales/use tax is charged. Do I care? Not really, I go for the cheapest price, But then I get SSI-D as I'm physically disabled(I don't use a wheelchair except for places like Disneyland and yes I can get out of one on My own and I'm still disabled, though to some I'm not if I can walk even two feet.) I have It on good authority that My bank account can not be garnished, by anyone, the CA FTB and Legislature can go to blazes for all I care on this, as I've been stabbed in the back by them enough as it is. Heck cause of cash out I can't get Food Stamps, but then neither can any SSI-D recipient who lives in CA get Food Stamps, I'd have to try and exist in one of the other 49 states to get Food Stamps. But then I'd have to move and I don't have the money for moving, yet. I sure wouldn't be able to move put of CA as its too expensive and I can't save up more then $2,000 legally, although if HR 2103 were to become law I could save more, But I think Repubs will table the bill in committee which will kill it, 8 sponsors or not.

[ Parent ]
Maybe not, but it still hurts CA businesses. (8.00 / 1)
For instance, when it comes to computer parts and electronics, Newegg.com is very popular for good reason-- customer service and fast shipping. However, they have to compete against Amazon, and since Newegg is based in California, well, you know the rest. I'm sure they'd be ecstatic if Amazon lost its battle.

[ Parent ]
Ok Newegg is good (0.00 / 0)
I'll grant You that, but they aren't selling the water cooling parts from Bitspower that I need or the used GTX295 Single PCB video card that I need(it's for a project, newer won't do, it has to match 5 other like cards in one case), Nor a case made by Mountain Mods or Little Devil PC-V8 case(both are capable of water cooling and using 2 psus at the same time without modding, of course I do need to buy 1 or 2 power supplies too, might be used, I don't know right now), None of these parts does Newegg carry, places like Performance PCs, ebay, Mountain Mods, Frozen CPU all do and all just happen to be out of state, Beyond CA law and taxation authority(except for ebay, but You'll find their against sales tax as they don't sell anything, they host others who sell or try too at least and not all of them are located in CA), No equivalent exists in CA that I know of. So I shop out of state, I'm not going to some local place to special order any of this stuff(no refunds with special orders) and the state of California can't make Me either, I'll shop where I see what I need. Someone not like this? Probably, cry Me a river, It won't help, nor change a thing, My time is My own to do with as I please. As I have no boss, I can think for Myself and last I looked it's not a crime.

[ Parent ]
Sales tax is the problem (0.00 / 0)
Progressives backing sales taxes. The most regressive taxes that exist.

There should be no sales taxes. There should be progressive taxes paid by people who make money on transactions of all types.

So-called progressives focusing on Amazon are co-opted progressives. Or moles.

The fact is, this issue is being used to make progressives argue for sales taxes.

That is dark irony.


that's a wild overstatement. (0.00 / 0)
Granted that sales taxes are a terrible way to raise revenue, I think it's possible for a progressive to say "if we're going to have a sales tax, it shouldn't discriminate in favor of out-of-state online businesses."

I mean: defeat on one issue shouldn't stop us from trying to build the most progressive world we can after the defeat, right?


[ Parent ]
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