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: 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.