Amazon has announced that
it is closing one of its distribution centers and canceling operation
expansions in Texas due to a dispute with the state's comptroller over millions
of dollars in sales taxes. However, Governor Rick Perry (R-Texas) isn't letting
the internet retail giant go that easily.
made the decision to close a suburban Dallas distribution center after Texas
State Comptroller Susan Combs told the company that they were responsible for
$269 million in sales
taxes that were not collected on online sales in the
regret losing any business in Texas, but our position hasn't changed: If you
have a presence in the state of Texas, you are required to pay sales tax just
like any other business that has a presence in Texas," said Allen Spelce,
a spokesman for Texas Comptroller Susan Combs.
disagrees with Combs' decision to charge Amazon millions of dollars in sales
taxes, and to let the company leave the state of Texas. Amazon's decision to
close its Irving distribution center and cancel plans to expand operations in
Texas will result in job losses as well as the loss of tens of millions of
investment dollars to the state.
is a problem and I would suggest to you that we need to look at that decision
that our comptroller made," said Perry. "The comptroller made that
decision independently. I would tell you from my perspective that's not the
decision I would have made."
added that Combs shouldn't have pinned the sales taxes on Amazon's Dallas
distribution center, since it doesn't have a storefront and is not responsible
for such matters.
couldn't go in and buy anything out
of that store, and that, historically, has been the way we defined whether you
pay taxes or not - if you had a storefront," said Perry. "This
obviously didn't have a storefront. It was specifically there to manage
products that need to be shipped out."
looking to get the legislature involved to keep Amazon in
Texas, but it may already be too late. Amazon's Dave Clark, vice president of
operations, has announced that the company will close its Irving distribution
center on April 12, and will cease all plans to expand operations in the state
of Texas, which will eliminate 1,000 potential jobs and cut tens of millions of
potential investment dollars to the state as well.
don't want to be onerous on tax policy where businesses and I would say I'm
having a hard time getting my hands around this one," said Perry. "Texas should be a bastion for businesses, not one
where they're sitting there going 'we'd rather go over to Oklahoma where we
could get a better deal.' Texas doesn't want to make itself less competitive
with its tax decisions."
to Spelce, Texas loses about $600 million in online sales taxes annually.
Currently, a case is pending before
the State Office of Administrative Hearings regarding the $269 million in sales
taxes from Amazon.
quote: "You couldn't go in and buy anything out of that store, and that, historically, has been the way we defined whether you pay taxes or not - if you had a storefront," said Perry.
quote: If international businesses (we are not discussing small mom & pop sellers) choose not to collect state tax, local tax, VAT, or flat tax from their consumer (as Amazon did), then states (or the taxing entity) can send the tax bill directly to the international business (as Texas did). If Amazon was in British Columbia instead of the U.S., the situation would be the same.
quote: why wouldn't Amazon simply move all of their operations out of the country?
quote: ***Local businesses should be on the same footing as non-local businesses. If you favor non-local businesses by not imposing the same tax on them as you do everyone else, then you are directly causing dollars to leave the state.
quote: Non-collection of State Sales Tax AFFECTS EVERYONE. It lowers real estate values, it lowers employment, it lowers local tax collection, it lowers state tax collection.
quote: I'd have to look at a case where they are though. I know he said that historically this was not the case, but I certainly cannot think of any company that is exempt because it has no store front. Ultimately he is a politician so I don't think I'd put too much stock in what he says.
quote: (A) maintains, occupies, or uses, permanently or temporarily, directly or indirectly, or through an agent, by whatever name called, a kiosk, office, place of distribution, sales or sample room, warehouse or storage place, or other place where business is conducted; (B) has any representative, agent, salesperson, canvasser, or solicitor who operates in this state under the authority of the seller to conduct business, including selling, delivering, or taking orders for taxable items;
quote: An out-of-state seller who has been engaged in business in Texas continues to be responsible for collection of Texas use tax on sales made into Texas for 12 months after the seller ceases to be engaged in business in Texas.
quote: If you buy lots of goods from the Internet and do not account for it on your Indiana tax return, then you are cheating on your state income tax return. I am an Indiana resident, and I personally figured out how much I spent on Amazon and paid tax on it.
quote: Amazon is a tax dodger, so they do not collect sales tax when you make online purchases, but they should be collecting it. They have a financial and competitive interest in not collecting taxes.
quote: Texas law is written that if you have any operations be it store front, warehouse, shipping center and the item is delivered in the state that you have to collect sales tax on it.
quote: This said, the current system is broken. Most online buyers do not pay the sales tax, and this loophole for online purchases is becoming more and more significant in terms of revenue lost to the state governments. I think it will be important to resolve it decisively in a just and uniform manner. The system as it is places unfair burden on brick&mortar businesses.
quote: They dont use police. They dont use fire. They dont use the highways.
quote: they were responsible for $269 million in sales taxes that were not collected on online sales in the state.
quote: Texas loses about $600 million in online sales taxes annually