Amazon’s sales-tax scheme

Remember the tussle last year over a state law requiring giant e-tailers like Amazon.com to begin collecting sales tax on Internet purchases? At first Amazon tried to qualify an initiative measure to overturn it, but then it abandoned that effort and agreed to begin collecting the taxes in September of this year.

Guess what. It turns out much of the money will go to Amazon.

That’s because Amazon is setting up two distribution centers in California, one in San Bernardino and one in the Central Valley town of Patterson, according to the Los Angeles Times. To attract Amazon, officials in both cities agreed to kick back most of their share of sales taxes.

Wait, it gets worse.

Once the distribution centers are up and running, Amazon will be able to designate them as legal “points of sale,” permitting the company to direct 100 percent of the city share of sales taxes statewide—many millions of dollars—to Patterson and San Bernardino. Those cities, in turn, have agreed to pass on as much as 80 percent of the money to Amazon.

Amazon isn’t the only e-tailer seeking rebates. Up and down the state big Internet companies are squeezing money out of cities by forcing them to compete to become “points of sale.” This needs to end.

The Legislature can resolve the issue by eliminating the point-of-sale provision and the accompanying sales-tax rebates. The taxes should be distributed proportionally to the cities where the purchases were made so they can be used as intended, for police, parks and street repairs.