California lawmakers finally agreed to give online giant Amazon.com and other web retailers a reprieve from collecting sales taxes while they lobbied Congress for a national approach.
Under an agreement that is being referred to governor Jerry Brown, the sales tax collection by Amazon would be delayed by the state to September 2012. On its part, Amazon would call off efforts to repeal California's law at the ballot box.
Brown has not indicated whether the plan would meet his endorsement, and others remain sceptical that Congress would let Amazon go on an internet sales tax law.
According to Republican assemblyman Chris Norby, the bill represented a truce among the major players involved. He added a truce was not a peace treaty, but it was better than war.
Brown's top priority, a $1-billion package aimed at raising taxes from out-of-state corporations to provide breaks for California-based taxpayers, seemed to be voted down yesterday. The governor had pitched the proposal as a job creation measure as the state struggled with a 12 per cent unemployment rate.
Brown issued a statement expressing his disappointment. "It's unbelievable that so many politicians in Sacramento would choose to protect cigarette makers and out-of-state corporations to the detriment of California jobs," he said.