By MARCUS WOHLSEN
Associated Press
SAN FRANCISCO (AP) - A political fight over whether Internet retailers should collect sales tax will move from statehouses to Congress after California Gov. Jerry Brown signed a bill Friday that represents a compromise among Amazon.com, traditional retailers and lawmakers searching for ways to raise revenue.
By signing AB155, Brown delayed tax rules implemented earlier this summer as part of the state budget package until at least September 2012. The reprieve will give online and traditional retailers time to lobby Congress for a national standard on collecting sales tax for online purchases.
If that effort fails, Amazon has agreed to start collecting sales tax from California customers. The budget bill signed previously by Brown forced more online retailers to collect the state sales tax effective July 1. The move prompted Amazon to cut ties with some 25,000 affiliate businesses in California and spend more than $5 million to collect signatures for a 2012 referendum drive to repeal the law.
The compromise bill will cost California an estimated $200 million in tax revenue during the current fiscal year but helps both sides avoid a costly election contest next year and the possibility of legal challenges.
Under the deal, the retailing giant will rekindle its relationship with its California affiliates and end its referendum drive.