Amazon cuts deal on California sales taxes

Amazon cut a tentative deal with legislative leaders that would allow it to postpone collecting sales taxes from Californians for another year.

The company in turn would drop its battle to overturn the state's new law that required it and many other out-of-state online retailers to collect the taxes. Under the deal, Amazon would delay collecting taxes until September 2012, Assemblyman Charles Calderon (D-Whittier) said. The new law had mandated that Internet retailers start collecting state taxes in July if they had offices, workers or other connections in California. Amazon had refused to collect the taxes and poured $5 million into collecting signatures for a ballot referendum challenging the law. If Congress acts by next summer to settle the contentious issue of how online retailers should be taxed, that decision would override Amazon's deal with California.