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Calif. Assembly requires Amazon to collect sales tax
May 31, 2011 / 11:57 PM / in 6 years

Calif. Assembly requires Amazon to collect sales tax

* Calif. Assembly votes 50-18 in favor of bill

* Bill targets online retailers with “physical presence”

NEW YORK, May 31 (Reuters) - The California State Assembly on Tuesday passed a bill that requires Web retailers such as Amazon.com Inc (AMZN.O)to collect sales tax on purchases made online.

The bill was approved 50-18, Tom White, chief of staff to Majority Leader Charles Calderon, a Democrat, told Reuters. The bill, which needed 41 votes to pass, now will be sent to the Senate.

The bill stipulates that online retailers with a physical presence, including “affiliates” -- independent Web operators who get a fee for directing traffic to Amazon if it yields a sale -- must collect sales tax from sales made to California residents.

The California Board of Equalization estimates that such a tax could bring $83 million to the state’s coffers.

Amazon declined to comment on the vote but last month the company’s chief executive Jeff Bezos said at a conference in Yonkers, New York, that Amazon “will continue to drop states who pass those affiliate laws, from the affiliate program.”

Amazon has about 10,000 affiliates in California.

Amazon has already announced plans to cancel its affiliate program in Illinois in response to that state’s law passed in March. Texas is one of several states considering taxing online sales. (Reporting by Phil Wahba; Editing by Gary Hill)

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