Amazon.com has sent a letter to the governor and the state Legislature threatening to sever its contracts with California businesses if a tax bill authored by Berkeley Assemblywoman Nancy Skinner becomes law, according to the Wall Street Journal. Skinner's bill would force Amazon.com to start collecting sales tax in the state. Skinner introduced the bill earlier this year because of the devastating effects the giant online retailer has had on small retailers, especially because it doesn't charge consumers sales tax.
Her bill is patterned after a similar law in New York that was upheld by a judge after Amazon.com challenged it. A big part of Amazon.com's business model is to contract with smaller web sites, who then act as sales agents for the online goliath. In its letter to California leading politicians, Amazon.com threatened to dissolve those contracts if Skinner's bill becomes law so it won't have to start collecting sales tax.