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Amazon promises 7,000 California jobs in return for tax hiatus

September 1, 2011 12:00:00 AM PDT
The online sales tax battle flares up again in Sacramento. Amazon.com says it'll bring thousands of new jobs to California, but there's a catch: a delay in implementing that tax plan. Amazon's offer is getting a mixed reaction.

Companies routinely complain how California's regulations are too burdensome, making it difficult to expand or hire. New proposals forged by Democrats and business leaders hope to change that.

"With an 11.8-percent unemployment rate in the state, we simply have no time to waste," said state Assembly Speaker John Perez (D-Los Angeles).

Regulatory relief is what Republicans have been pushing for, but they contend the Legislature is still approving bills that keep California unfriendly to business.

"This is a plus? Indeed. Is it going to part the Red Sea and make California hospitable again? No," said state Assm. Jim Nielsen (R-Gerber).

One company willing to bring 7,000 jobs to California is online retail giant Amazon.com, which proposed to legislative leaders this week it would open six distribution sites.

In exchange, they would have to suspend the state's new online sales tax until 2014.

But the California Retailers Association questions whether the Amazon proposal will really help.

Stores haven't been able to compete with "e-tailers" that have enjoyed a price advantage when they don't collect the sales tax. The difference has resulted in layoffs.

"There's really no net increase in jobs because between now and 2014, the bricks-and-mortar retail will continue to lose jobs," said Bill Dombrowski, president and CEO, California Retailers Association.

As much as they'd love to claim the creation of 7,000 jobs, losing millions from the online sales tax that would go to state coffers is too much of a tradeoff for Democrats.

"I don't think we can afford to just say Well, let's set $400 million aside," said state Senator Darrell Steinberg (D-Sacramento), senate president.

More than 2 million Californians are out of work, though, enough for Governor Jerry Brown to at least read Amazon's proposal.

"I'm open to any good constructive idea to create jobs," said Brown.

Session ends in a week. It's a race against the clock to get the Amazon proposal and regulatory relief plan approved.


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