California lawmakers thought they were targeting Amazon.com, the out-of-state giant, when they voted last week to force Internet retailers to collect sales tax.
It turns out eBay Inc., California's own golden child of e-commerce, isn't so thrilled about it, either.
The San Jose online auction company says the legislation would hurt its business model, which relies on thousands of entrepreneurs who sell goods on its site.
The intent may have been to go after Amazon, but "we're literally caught in the crossfire," said David London, senior director for state government relations at eBay.
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Legislators have tried for years to tax Internet commerce. Last week they passed the latest version of the so-called "Amazon tax," requiring online retailers to collect California sales tax from their customers.
Gov. Jerry Brown has given the legislation his tentative blessing, telling reporters last week that it's a "common sense idea."
The legislation, AB28 X1, is in some limbo, however. It was part of the budget package that Brown vetoed, and legislative staffers have been trying to determine whether the Internet bill can go to the governor as is, or must be passed again by the Legislature.
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