California Cities Call on Amazon to Fix ‘Tremendous Inequity’ in Tax Revenue

Todd Bishop, GeekWire
Todd Bishop is GeekWire's co-founder and editor, a longtime technology journalist who covers subjects including cloud tech, e-commerce, virtual reality, devices, apps and tech giants such as, Apple, Microsoft and Google. Follow him @toddbishop, email, or call (206) 294-6255.
California Cities Call on Amazon to Fix ‘Tremendous Inequity’ in Tax Revenue

Some California cities are calling on the state to return to a more equitable method of sharing tax revenue generated by Amazon's online sales — warning that a change made earlier this year creates an unfair system of "winners and losers" in the disbursement of millions of dollars used for critical public services.

The stakes are high: Amazon is bigger in California than in any other state, with 60 fulfillment and sortation centers, 50 delivery stations, and 153,000 employees. That's according to its official count as of the end of 2020. The numbers are even higher now, given the rapid expansion of Amazon's fulfillment and delivery network.

In theory, California's cities should be benefitting from that growth. Amazon has been collecting sales tax from online purchases in California since 2012.

Until this year, that tax revenue was disbursed based on the customer's location, going to the local municipality where the product was delivered. But as of earlier this year, the practice changed to give the tax revenue to the municipality from which the item was shipped, the location of the Amazon fulfillment center.

City officials from across the state will consider the issue at the upcoming League of California Cities annual conference. A proposal submitted to the group by the City of Rancho Cucamonga, Calif., would call on the state to enact "a fair and equitable distribution" of the 1% percent sales tax from in-state online purchases.

"This change has created a situation where most cities in California – more than 90%, in fact – are experiencing a sales tax revenue loss that began in the fourth quarter of calendar year 2021," reads a report from Rancho Cucamonga accompanying its proposal to the group, known as Cal Cities.

The report adds, "Many cities may not be aware of this impact, as the fluctuations in sales tax following the pandemic shutdowns have masked the issue. But this change will have long-term impacts on revenues for all California cities as all these revenues benefiting all cities have shifted to just a handful of cities and counties that are home to this retailer's fulfillment centers."

The change has resulted in Amazon's sales tax revenue "being entirely allocated to the specific city where the warehouse fulfillment center is located as opposed to going into a countywide pool that is shared with all jurisdictions," according to Rancho Cucamonga's proposal.

The proposal attributes the shift to a change by Amazon in the ownership of its fulfillment centers from a third-party vendor to the company itself, which alters how its sales are treated under California's tax policy.

Amazon disputes this explanation, and says it is simply following guidance from the California Department of Tax and Fee Administration (CDTFA), which determines how sales tax revenue for Amazon online purchases should be treated.

"As a company with operations in California, we are obligated to follow the tax collecting guidance set by the state and have adjusted our tax collection process to ensure we remain compliant with the law," an Amazon spokesperson said in a statement to GeekWire this week. "We are committed to investing in the communities in which we operate and helping local economies grow."

California cities rely heavily on sales tax as a revenue source, due the limitations put on property taxes by Proposition 13 starting in 1978. A 1% local sales tax, known as the Bradley Burns tax, has been in place across the state since the 1950s.

The change in tax revenue distribution from Amazon sales "has created a tremendous inequity amongst cities, in particular for cities that are built out, do not have space for siting a 1 million square foot fulfillment center, are not located along a major travel corridor, or otherwise not ideally suited to host a fulfillment center," the Rancho Cucamonga proposal says.

It adds, "These policies especially favor retailers who may leverage current policy in order to negotiate favorable sales tax sharing agreements, providing more money back to the retailer at the expense of funding critical public services."

The proposal acknowledges "that those cities that have fulfillment centers experience impacts from these activities and deserve equitable supplementary compensation." However, it adds, "the neighboring cities whose residents are ordering product from that center now receive no revenue from the center's sales activity despite also experiencing the impacts created by the center, such as increased traffic and air pollution."

Rancho Cucamonga's proposal received initial endorsements from cities including Placentia, Sacramento, Moorpark, Lakewood, La Verne, and El Cerrito. Leaders in other cities across the state have since signaled their support, as well.

The proposal will be considered at the Cal Cities annual conference, Sept. 22-24 in Sacramento. Approval would enable the group to pursue legislative changes.

This story originally appeared on GeekWire.

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'Open Letter' Proposing 6-Month AI Moratorium Continues to Muddy the Waters Around the Technology

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
'Open Letter' Proposing 6-Month AI Moratorium Continues to Muddy the Waters Around the Technology
Evan Xie

AI continues to dominate the news – not just within the world of technology, but mainstream news sources at this point – and the stories have entered a by-now familiar cycle. A wave of exciting new developments, releases and viral apps is followed by a flood of alarm bells and concerned op-eds, wondering out loud whether or not things are moving too fast for humanity’s own good.

With OpenAI and Microsoft’s GPT-4 arriving a few weeks ago to massive enthusiasm, we were overdue for our next hit of jaded cynicism, warning about the potentially dire impact of intuitive chatbots and text-to-image generators.

Sure enough, this week, more than 1,000 signatories released an open letter calling for all AI labs to pause training any new systems more powerful than GPT-4 for six months.

What does the letter say?

The letter calls out a number of familiar concerns for anyone who has been reading up on AI development this past year. On the most immediate and practical level, it cautions that chatbots and automated text generators could potentially eliminate vast swathes of jobs previously filled by humans, while “flood[ing] our information channels with propaganda and untruth.” The letter then continues into full apocalypse mode, warning that “nonhuman minds” could eventually render us obsolete and dominate us, risking “loss of control of our civilization.”

The six-month break, the signatories argue, could be used to jointly develop shared safety protocols around AI design to ensure that they remain “safe beyond a reasonable doubt.” They also suggest that AI developers work in collaboration with policymakers and politicians to develop new laws and regulations around AI and AI research.

The letter was signed by several AI developers and experts, along with tech industry royalty like Elon Musk and Steve Wozniak. TechCrunch does point out that no one from inside OpenAI seems to have signed it, nor Anthropic, a group of former OpenAI developers who left to design their own “safer” chatbots. OpenAI CEO Sam Altman did speak to the Wall Street Journal this week in reference to the letter, noting that the company has not yet started work on GPT-5 and that time for safety tests has always been built into their development process. He referred to the letter’s overall message as “preaching to the choir.”

Critics of the letter

The call for an AI ban was not without critics, though. Journalist and investor Ben Parr noted that the vague language makes it functionally meaningless, without any kind of metrics to gauge how “powerful” an AI system has become or suggestions for how to enforce a global AI ban. He also notes that some signatories, including Musk, are OpenAI and ChatGPT competitors, potentially giving them a personal stake in this fight beyond just concern for the future of civilization. Others, like NBC News reporter Ben Collins, suggested that the dire AI warnings could be a form of dystopian marketing.

On Twitter, entrepreneur Chris Pirillo noted that “the genie is already out of the bottle” in terms of AI development, while physicist and author David Deutsch called out the letter for confusing today’s AI apps with the Artificial General Intelligence (AGI) systems still only seen in sci-fi films and TV shows.

Legitimate red flags

Obviously, the letter speaks to relatively universal concerns. It’s easy to imagine why writers would be concerned by, say, BuzzFeed now using AI to write entire articles and not just quizzes. (The website isn’t even using professional writers to collaborate with and copy-edit the software anymore. The new humans helping out “Buzzy the Robot” to compose its articles are non-editorial employees from the client partnership, account management, and product management teams. Hey, it’s just an “experiment,” freelancers!)

But it does once more raise some red flags about the potentially misleading ways that some in the industry and the media are discussing AI, which continues to make these kinds of high-level discussions around the technology more cumbersome and challenging.

A recent viral Twitter thread credited ChatGPT-4 with saving a dog’s life, leading to a lot of breathlessly excited coverage about how computers were already smarter than your neighborhood veterinarian. The owner entered the dog’s symptoms into the chatbot, along with copies of its blood work, and ChatGPT responded with the most common potential ailments. As it turns out, a live human doctor tested the animal for one of the bot’s suggested illnesses and accurately guessed the diagnosis. So the computer is, in a very real sense, a hero.

Still, considering what might be wrong with dogs based on their symptoms isn’t what ChatGPT does best. It’s not a medical or veterinary diagnostic tool, and it doesn’t have a database of dog ailments and treatments at the ready. It’s designed for conversations, and it’s just guessing as to what might be wrong with the animal based on the texts on which it was trained, sentences and phrases that it has seen connected in human writing in the past. In this case, the app guessed correctly, and that’s certainly good news for one special pupper. But there’s no guarantee it would get the right answer every time, or even most of the time. We’ve seen a lot of evidence that ChatGPT is perfectly willing to lie, and can’t actually tell the difference between truth and a lie.

There’s also already a perfectly solid technology that this person could have used to enter a dog’s symptoms and research potential diagnoses and treatments: Google search. A search results page also isn’t guaranteed to come up with the correct answer, but it’s as if not more reliable in this particular use case than ChatGPT-4, at least for now. A quality post on a reliable veterinary website would hopefully contain similar information to the version ChatGPT pulled together, except it would have been vetted and verified by an actual human expert.

Have we seen too many sci-fi movies?

A response published in Time by computer scientist Eliezer Yudkowsky – long considered a thought leader in the development of artificial general intelligence – argues that the open letter doesn’t go far enough. Yudkowsky suggests that we’re currently on a path toward “building a superhumanly smart AI,” which will very likely result in the death of every human being on the planet.

No, really, that’s what he says! The editorial takes some very dramatic turns that feel pulled directly from the realms of science-fiction and fantasy. At one point, he warns: “A sufficiently intelligent AI won’t stay confined to computers for long. In today’s world you can email DNA strings to laboratories that will produce proteins on demand, allowing an AI initially confined to the internet to build artificial life forms or bootstrap straight to postbiological molecular manufacturing.” This is the actual plot of the 1995 B-movie “Virtuosity,” in which an AI serial killer app (played by Russell Crowe!) designed to help train police officers grows his own biomechanical body and wreaks havoc on the physical world. Thank goodness Denzel Washington is around to stop him.

And, hey, just because AI-fueled nightmares have made their way into classic films, that doesn’t mean they can’t also happen in the real world. But it nonetheless feels like a bit of a leap to go from text-to-image generators and chatbots – no matter how impressive – to computer programs that can grow their own bodies in a lab, then use those bodies to take control of our military and government apparatus. Perhaps there’s a direct line between the experiments being done today and truly conscious, self-aware, thinking machines down the road. But, as Deutsch cautioned in his tweet, it’s important to remember that AI and AGI are not necessarily the exact same thing.

Will EVGo’s Stock Surges Be Enough To Keep the Company Stable?

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Will EVGo’s Stock Surges Be Enough To Keep the Company Stable?
Image from EVGo

Shares of EVgo are up over 20% today after the company released Q4 earnings that outpaced predictions from Wall Street. Analysts had predicted the company would announce a loss per share in the neighborhood of $0.16-$0.18, but the Los Angeles-based electric vehicle charging company reported a much more meager loss, to the tune of just $0.06 per share.

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AgTech Startup Leaf is Helping Farmers Brace for Unexpected Rainfall After Record Year

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to and find him on Twitter @Samsonamore.

green leaf drawing and rolling farm lands
Evan Xie

At least 50,000 acres in the state of California are estimated to be underwater after a record-breaking year of rainfall. So far this year, California has received nearly 29 inches of rain, with the bulk being dumped on its central and southern coasts. Farmers are already warning that the price of dairy, tomatoes and other vegetables will rise as the weather prevents them from re-seeding their fields.

While no current technology can prevent weather disasters, Leaf Agriculture, a Los Angeles-based startup that launched in 2018, wants to help farmers better manage their properties by leveraging data.

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