theodp writes "Eager to host Amazon warehouses and receive a cut of the tax on sales to customers statewide, the LA Times reports that two California cities are offering Amazon most of the tax money they stand to gain. After agreeing to collect California sales taxes beginning in the fall, Amazon is setting up two fulfillment centers in San Bernadino and Patterson, which will gain not only jobs but also a tax bonanza: Sales to Amazon customers throughout California will be deemed to take place there, so all the sales tax earmarked for local government operations will go to those two cities. The windfall is so lucrative that local officials are preparing to give Amazon the lion's share of their take as a reward for setting up shop there. 'The tax is supposed to be supporting government,' said Lenny Goldberg, executive director of the California Tax Reform Assn., of the proposed sales-tax rebate. 'Instead, it's going back into Amazon's pocket.' Sen. Mark DeSaulnier added: 'It seems like the private sector finds a way to pit one city against the other. You can't give away sales tax in this manner.'"