Amazon has implemented an interesting sales and use tax strategy over the past few years. The battle between the online juggernaut can be best exemplified in California. California attempted to force Amazon to collect California sales and use tax in 2011. Amazon called California’s ultimatum by threatening to pull any ties with California which would cost thousands of jobs. On second thought, California agreed to not force Amazon to collect sales and use tax until September 2012 in exchange for a promise by Amazon to open numerous distribution facilities, which would increase job opportunities in the state.

Putting personal feelings and constitutional implications aside, the move makes sense from both sides. California has the highest statewide sales tax rate of about 7.5%, and many localities have an additional .91%. However, in a time of recession, what can be more valuable to a state’s economy than thousands of jobs? Opponents of the settlement will remind us that it is not fair to have special rules for online retail giants like Amazon.

Despite what anyone thinks of the agreement, it was announced that Amazon opened yet another distribution center in Moreno Valley at the end of October, 2013. The fourth Californian facility encompasses some 1.2 million square feet. In addition, the facility will house an estimated 1,000 full time workers. This facility brings Amazon-related jobs to about 2,400 in California. In total, Amazon pledged to spend in the neighborhood of $500 million and create 10,000 jobs by 2015.

California allegedly joined with Amazon on the legislative front. The two were reported to be on the same side of the aisle and agreed to push for a national standard to tax online purchases. While such a law would require Amazon to collect and remit tax on a national scale, it may also put smaller companies on the same playing field. In addition, it has been reported that Amazon will offer services to help smaller online retailers to comply with, collect, and remit tax in the nation’s some 9,600 state and local tax jurisdictions. This would theoretically put a dent in the some one billion dollars California estimates it loses in online merchants that do not charge Californians sales and use tax.