Amazon.com struck a deal with California legislators Wednesday night to potentially delay its sales tax collection for another year.

The catch is that Amazon would end its $5 million campaign to overturn a law that forces it and many other out-of-state e-tailers to collect sales tax on online purchases made from California.

Gov. Jerry Brown in June signed Assembly Bill 28X into law. The bill requires online retailers with in-state affiliates, such as Amazon, Overstock and eBay, to collect sales taxes. Affiliates include blogs and other Web sites that direct shoppers to online stores and collect commissions for sales.

Amazon responded by ending its affiliate advertising program with 25,000 California Web sites.

The tax is supported by big-box and brick-and-mortar retailers that argue it would even the playing field and generate an estimated $200 million a year in new state and government tax revenues.

“California is technically bankrupt, and our state government is looking for any and all means to secure additional tax funding to address the funding shortfalls,” said Michael Holliday, board president of the Santa Barbara Region Chamber of Commerce.

But Amazon maintains that the law is unconstitutional and that similar legislation in other states has led to job and income losses and little new tax revenue.

The tentative deal would mean Amazon could delay collecting the taxes until September 2012, unless Congress comes up with a national solution before then and trumps the deal. The agreement is being written as an amendment to the state law, and the changes may be voted on this week.

“Amazon is trying to give them enough time to pass federal legislation instead of arguing state by state,” said Brad Stark, principal and co-founder of Mission Wealth Management.

AB 28X allows enforcement of California’s “use tax” law. The tax, created in 1935, is supposed to be paid by California consumers on all taxable goods purchased out of state. Although legally bound, most consumers don’t report purchases from out-of-state retailers and avoid the tax altogether.

Before the passage of AB28X, a 1992 U.S. Supreme Court ruling deemed it unconstitutional for California to make retailers collect the tax unless they have a physical in-state presence.

But New York passed a law to require companies with online affiliate advertising programs to collect sales tax for sales through those affiliates based in New York in 2008. Since then, Arkansas, Connecticut, Illinois, North Carolina and Rhode Island have passed similar laws. Amazon is suing New York over the law, and the Performance Marketing Association is suing Illinois.

Regardless of the outcome, Stark said people will continue to buy online because of the convenience factor.

“Convenience comes first,” he said.

— Noozhawk business writer Alex Kacik can be reached at akacik@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.