backtop


Print 62 comment(s) - last by dever.. on May 15 at 2:12 PM

State thinks online giant owes them millions of back taxes

Online retailer Amazon.com may owe the state of Texas four years of back sales taxes for purchases from Lone Star residents, due to a fulfillment center the company owns in Irving, Texas.

Following recent developments in New York, which recently passed a controversial sales tax that Amazon feels unfairly targeted by – some state officials nicknamed it the “Amazon Tax” – the Texas Comptroller’s office decided to open an investigation into Amazon’s Irving fulfillment facility, after being contacted by a reporter from the Dallas Morning News with questions regarding the company’s tax payments.

Amazon says that state officials are fully aware of the facility and its operations, and that it does not have to pay sales taxes because it operates the fulfillment center under Amazon subsidiary “Amazon.com.kydc, Inc.”

“We remain in compliance with all Texas laws governing sales tax collection,” said Amazon spokeswoman Patty Smith. Texas law doesn’t require subsidiaries to collect sales tax.

Complicating matters are the fulfillment center’s records filed with the state, which in 2006 and 2007 listed “Amazon.com” as the owner instead of its “kydc” subsidiary. Such a mistake, if it was one, would force the company to be liable for millions in back sales taxes over the past four years, which the Comptroller’s office fully intends to collect. The current sales tax rate in Texas is 6.25%.

Currently, internet retailers are only entitled to collect sales tax from customers residing in a state that the company has a significant presence in. While out-of-state customers are still obligated to pay “use tax” for out of state purchases, actual consumption is untracked and, consequently, most consumers choose not to pay it. Both United States federal and state governments have made it clear that they intend to change this system: several states, like New York, are gunning for ways to enforce use taxes, and the IRS last week made it clear that it wants to tax transactions through user-to-user sites like eBay and Craigslist.

Nonetheless, the Texas Comptroller’s Office says it will continue its investigation, and does not know when it will complete.

“We continue to interact with and cooperate with local and state Texas tax officials at many levels,” said Smith. “The state of Texas is fully aware of Amazon.com’s subsidiaries’ Texas operations.”



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: The Gov Needs To Back Down
By bhieb on 5/14/2008 2:18:16 PM , Rating: 2
Actually you cannot just give it all away, if it exceeds a certain yearly/lifetime cap you have to pay gift tax which is just as bad.

The whole idea of double taxation on money for the inheritance tax just bugs me.

If I recall correctly it was done for families like the Rockefellers. If I'm not mistaken it was estimated that if there was no inhert. tax that family would have enough money to buy every acre of land in the US. Now certainly no one wants that, but there has to be something better than the current method.

Let's say I work my lifetime and want to leave $1mil to my kid ($1mil for a lifetime of work is not too far fetched). The tax on that is in the neighborhood of 45% that is just asinine. Fine cap it so if Gates just hordes his money there is a penalty (just to prevent the above senario), but 45% that is almost half! Plus lets not forget we've already collected 10% more than the average person most of his life plus his kids will have an extra 10% taken because they can "afford" it.


"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

Related Articles
IRS Wants to Tax Online Sales
May 8, 2007, 9:30 AM













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki