Amazon to Collect Online Sales Taxes in Texas Starting July 1, 2012
April 30, 2012 10:34 AM
comment(s) - last by
The e-tailer will also have to create 2,500 jobs in the state and make at least $200 million in capital investment in Texas over a four-year period
Amazon spent much of 2011 fighting tax-related battles in select U.S. states, claiming that it
could not be forced to collect taxes on online sales
without some sort of set standards. But Amazon is changing its tune in Texas, as it has agreed to start collecting taxes on online sales in the state starting this summer.
After more than a year of
fighting with the state of Texas
, Amazon has reached a settlement with Texas State Comptroller Susan Combs regarding $269 million in uncollected sales taxes on online items. The deal states that Amazon will begin collecting taxes on online sale items starting July 1, 2012 and that the e-tailer will create a minimum of 2,500 jobs. Amazon will also have to make at least $200 million in capital investment in Texas over a four-year period.
“While we continue to believe the assessment was without merit, in April 2012, we entered into a settlement with the State of Texas that included an agreement to collect sales taxes on applicable sales transactions for our US-focused internet retailers beginning July 1, 2012, resolution of Texas sales taxes up to that date, certain commitments related to capital investment and job creation in the state, and an immaterial payment to the state," said Amazon.
Amazon has been going to head-to-head with Texas over tax issues since February 2011. At that time, Combs told the online retailer that it was responsible for $269 million in sales taxes that were not collected on online sales in the state.
Amazon said that it does not have to collect sales taxes on items sold online because of a 1992 Supreme Court decision that excuses Amazon and other remote sellers from having to collect taxes in U.S. states that do not have the company's employees or warehouses operating within those states. While Amazon had a suburban Dallas distribution center in the state of Texas, it said that this was not enough of a physical presence to justify the collection of taxes.
After Combs pinned the $269 million in unpaid taxes on Amazon, the e-tailer announced that it was
closing its suburban Dallas distribution center and canceling operation expansions in Texas
"We 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 Combs.
But now, Amazon and Combs have struck a deal and are working toward federal legislation for set standards on the collection of online sales taxes.
“Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs working with us to advance federal legislation,” said Paul Misener, Amazon Vice President of Global Public Policy. “We strongly support the creation of a simplified and equitable federal framework, because Congressional action will protect states’ rights, level the playing field for all sellers, and give states like Texas the ability to obtain all the sales tax revenue that is already due.”
Texas isn't the only state that went after Amazon for online tax collection. Last year, Senator Dick Durbin (D-Ill.) introduced a bill called
the Main Street Fairness Act
, which would require all businesses, including those online, to collect sales taxes in the state where the consumer resides.
Amazon also ran into trouble with New York, where Amazon filed a lawsuit and lost in 2009 over a dispute concerning the collection of taxes
from out-of-state transactions through the online retailer.
California was another U.S. state that pushed Amazon away last year when it introduced an online sales tax bill that would require the e-tailer to collect. Amazon threatened to
terminate contracts with all California residents
in the Amazon Associates Program because it believed the new bill was unconstitutional. Later, Amazon asked California voters to
repeal the new sales tax law
offered the state 7,000 jobs
to put the tax law on hold.
Currently, Amazon only collects sales tax in Kansas, Kentucky, New York, North Dakota and Washington. Starting July 1, Texas will be added to that list. Amazon also agreed to start collecting sales tax on online items in California starting next year, and in Arizona in 2014.
This article is over a month old, voting and posting comments is disabled
RE: Shop local
4/30/2012 2:53:54 PM
I don't know where you live but the price difference is significant between online and local, not to mention diversity of products goes to online. I won't even talk about the cost of fuel and my time to go to a store. Sorry but online stomps local for most anything. Do I shop local for some things? Yep. Groceries, home improvement stuff among other things and these are done all at once typically. If I need a light bulb, I'm sure as hell NOT going to drive 20 mins one way to Home Depot, I'm going to order it online.
RE: Shop local
4/30/2012 3:58:48 PM
In fact I know some staples I can buy locally are more expensive online but I still order them. Why? It's just so damn convenient to have it delivered than to take an hour out of my day to go actually buy it in person.
The other thing is some stores have online only sales so their prices online are better than in the stores. Also, paying just state sales tax and shipping is still significantly cheaper than paying for state, county, and city taxes. Anybody living in Chicago, with the highest total sales tax in the country, would understand.
RE: Shop local
4/30/2012 8:41:00 PM
I'll just stop by Safeway on my way home from work to pick up my light bulbs. It's convenient, I don't pay for shipping, I get them right away, and my sales tax stays in town, where we desperately need it.
RE: Shop local
4/30/2012 8:46:39 PM
...and you'll pay for it in the long run. When the local stores are vacant, some of the out-of-work employees may turn to crime. Your city, running low on income to perform public services such as road repair, schools, etc, will just raise local parcel taxes to make up for the shortfall.
"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller
Amazon Offers Calif. 7K Jobs to Put Sales Tax Law on Hold; Dems, Retailers Refuse
September 2, 2011, 9:48 AM
New Online Sales Tax Bill Prompts Amazon to Cut Ties with California Sales Affiliates
June 30, 2011, 10:47 AM
Senator's Proposal May Force Amazon to Collect Sales Tax
June 3, 2011, 1:37 PM
Amazon CEO Calls State Tax Demands Unconstitutional
May 18, 2011, 10:27 AM
Amazon to Cease Operations in Texas over Tax Collection; State Gov. Looks to Change Retailer's Mind
February 14, 2011, 10:09 AM
AT&T Defeats Purpose of New Apple SIM, Locks iPad Air 2 SIMs to Its Network
October 24, 2014, 2:17 PM
Microsoft to Discontinue Free, Ad-supported Xbox Music Service on December 1
October 23, 2014, 10:03 AM
Christian Bale Confirmed to Play Steve Jobs in Upcoming Film
October 23, 2014, 8:43 AM
Monica Lewinsky Speaks Out, Calls Herself "Patient-Zero" for Internet Cyberbullying
October 21, 2014, 2:25 PM
Google Fiber Finally Heading to Austin, Texas in December
October 16, 2014, 11:48 AM
Dropbox Flexes Security Muscle, Appears to Have Squashed Password Breach
October 15, 2014, 12:12 PM
Most Popular Articles
Chinese Government Declares Digital War Against America's Top Tech Firms
October 20, 2014, 12:07 PM
Samsung Announces Galaxy S5 Plus with Snapdragon 805 Processor, LTE-A
October 22, 2014, 3:40 PM
Windows 8.1 + Android "Sell Mini PC" w/ Bay Trail Creates New PC Form Factor
October 20, 2014, 5:07 PM
Apple Releases iOS 8.1; Adds Apple Pay Support, SMS Relay, Instant Hotspot
October 20, 2014, 1:00 PM
Apple's iPad Air 2 Features Triple-core A8X Processor, 2GB of RAM
October 21, 2014, 8:32 PM
Latest Blog Posts
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information