Amazon cuts deal with California over sales taxes

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Seattle—Dominant e-commerce company, embroiled in sales tax battles across the country, has capitulated with California and, barring intervening federal tax policy, will start collecting state sales tax in September 2012. Like many other states seeking new sources of revenue, California this summer passed a law requiring e-commerce companies with subsidiaries in the state to collect sales tax. Amazon, denying its affiliated resellers constitute a state presence, had waged a political campaign in California to have the law overturned, but has backed off that stance. Amazon, with the backing of such groups as the Direct Marketing Association and the Performance Marketing Association, has long resisted states' efforts to collect sales taxes on Internet purchases. The company often has terminated programs with affiliates in states that insist on the practice. The company's deal with California appears to be the first instance in which Amazon has compromised on its no-sales-tax position
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