David's Deliberations 08/11/11



My political mentors taught me that in the U.S., good and bad political news travels from west to east. Tim Rutten, a Los Angeles Times columnist, made me aware of the harm Amazon actively creates in California--a harm that will affect residents in Washington, Maryland, Virginia and all our other states.

Amazon refuses to collect taxes for sales to customers residing in states without a physical facility, a warehouse. This tax shelter comes from a 1992 Supreme Court decision. California facing huge deficits, made more so by our troubled economy, asserted its authority to collect these taxes. In California, $1.9 billion is lost in revenue from Amazon alone. The legislature acted responsibly and said, "Amazon, pay up."

Now, Amazon is gathering signatures on an initiative petition to place the Amazon sales tax exemption on the ballot. A company that at last count is capitalized at $98.45 billion will spend upwards of $20 million to buy itself an exemption in the California referendum. What can we do in the face of such litigiousness?

Money doesn't always win. The tobacco industry regularly loses state and local ballot initiatives. So there is hope. Rutten writes: "The fact that it [Amazon] refuses to collect sales taxes obviously gives it a competitive advantage over all the brick and mortar book stores and appliance showrooms." Yes, Amazon has a competitive head start economically over independent bookstores, even those as deeply rooted in community as Politics & Prose.

But the harm Amazon does extends far beyond independent bookstores. The loss of revenue is immense, adversely affecting citizens in our ability to support our children with education, to serve the ill through Medicaid, and to protect our neighborhoods with adequate police and fire services.

We do not have to be helpless and supine. We can ask our local and state government officials to examine the California law and adapt it to our own local and state needs. When enough jurisdictions act then Congress will have to act.

It will not be an easy fight. Powerful interests will seek their exemptions as an entitlement. What stands out is the harm that Amazon does to the core institutions that serve all the people. Its refusal to collect state and local taxes malnourishes what holds us together as a people. That is the shameful behavior that Tim Rutten documents. That's a call to action.

- David Cohen