California governor signs tax deal with Amazon

SAN FRANCISCO Fri Sep 23, 2011 4:02pm EDT

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SAN FRANCISCO (Reuters) - A peace treaty between California's government and Amazon.com Inc became official on Friday with Governor Jerry Brown's signature on legislation striking a compromise between the two sides on taxing online sales.

Brown signed the bill in San Francisco, concluding a high-profile dispute between the government of the most populous U.S. state, backed by small and large bricks-and-mortar retailers, and the Seattle-based Internet retailer.

Amazon had been gearing up to press a statewide campaign for a ballot measure to overturn recent legislation requiring taxes to be collected on sales posted by online retailers through their affiliates located in California.

Representatives of Amazon and state officials earlier this month struck a deal in which the retailer would drop its campaign in exchange for a one-year reprieve from collecting the sales taxes.

The two sides expect talks in Washington will advance over the year on federal legislation on online sales taxes.

"A prolonged, costly ballot battle is a benefit to no one," Brown said in statement.

(Editing by Padraic Cassidy)

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