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

By Johnniewalker on 5/14/2008 6:12:39 PM , Rating: 2
Imagine you are an internet retailer for just 2 minutes. If every state could force you to collect their tax for them, what kind of paper-work nightmare would you have. You would have to track the sales tax rate for every state. Even worse, some states now require you to collect the tax based upon the rate in effect the item is received. So you can have different rates in different cities, counties, even within the same zip code. California's tax rate table alone has more than 100 different rates. And remember, these rates dont just all change at the same time. Cities, Counties, States change their tax rates all the time, and at any time. I'd imagine that there is a new tax rate going into effect somewhere in the USA every single day of every year. Most retailers pay their sales tax monthly. You have a miniumum of 50 tax returns a month!

And now that you pay taxes to all these states, guess what? You can get audited. What happens if each state decides to audit you just once every 5 years. Well, have fun going though 10 audits every year.

If Internet sales are going to be taxed, we should pick one low rate. Apply that rate to all Internet Sales. Have that tax be collected by a single entity, like the federal government - so that each business doesn't have to file 50 tax returns. Let the Feds keep half, and forward the other half to the state the purchase was made.

Or like others have said. Just go to a fair tax.

www.fairtax.org




"This is from the DailyTech.com. It's a science website." -- Rush Limbaugh

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