Articles in several statewide newspapers in the past few weeks suggested that the city might be working out an agreement with Amazon.com in which the company would get a rebate of a portion of the sales tax it generated for the city.
The city of San Bernardino, where Amazon.com is building a Southern California distribution center, used a similar deal to lure a Kohl’s Internet distribution center in 2010.
Starting Sept. 15, before the Patterson Amazon distribution center is even slated to open, Internet retailers will be required to collect 7.25 percent sales tax for all California purchases from their warehouses, according to the State Board of Equalization.
Where the product ships from is where the tax money will go, according to the law that was passed last year.
Of that 7.25 percent, 6.25 percent will go to the state and 1 percent to the city.
Those tax dollars could provide millions of dollars each year to the city of Patterson’s general fund, which is just more than $9 million. The city could spend the money however it chose.
City Manager Rod Butler said he was open to negotiation regarding sales tax revenue, but said the city had no deal and had not been contacted regarding the matter.
“We have had no direct contact with Amazon at all,” he said.
He also said there was no “quid pro quo,” meaning Amazon officials never said the company would go elsewhere without a deal.
The only contact the city has had with Amazon.com has been through real estate personnel putting together the project, Butler said.
No other company has a sales tax agreement in Patterson, and the city has not offered one to Amazon as part of a deal, despite the rumors, he said.
Amazon.com officials did not return calls for comment this week.
City Council members this week were divided about the merits of a tax-sharing agreement.
Mayor Luis Molina said he thought a discussion about tax sharing should take place.
“I just think we’re fortunate to have a company like Amazon coming to Patterson,” he said. “Everything should be on the table, but until they call us and say they want to talk about (tax sharing), we’ll sit and wait.”
On the other hand, Councilwoman Annette Smith said she knew of no deal and did not think such an agreement would be good for the city.
“In my opinion, it would be foolish to give back sales tax revenue that we need,” she said. “They chose Patterson, and it was devoid of any sales tax-sharing agreement.”
Councilman Dominic Farinha said any deal with Amazon would have to benefit the city.
“When that process does come about, the City Council will have to come up with a plan so the city gets their fair share,” he said. “Anything absent of that, I don’t recommend.”
Councilwoman Deborah Novelli expressed no opinion, as there is no proposal before the city at this time.
Councilman Larry Buehner did not return calls seeking comment.
• Reporter Nick Rappley can be reached at 892-6187, ext. 31, or firstname.lastname@example.org.