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
4/30/2012 3:50:37 PM
The thing is with this precedent Texas will go after EVERY online retailer that they feels owes them tax money so you won't be able to buy anything without paying sales tax.
Eventually you'll be back to Amazon.
4/30/2012 4:46:00 PM
You missed the point, the only reason TX had any leverage was that Amazon indeed did have a physical presence. I always found it's assertion that it wasn't enough, laughable.
So your assumption is wrong, if for example buy.com has literally no physical property in TX, then TX does not have a leg to stand on. That was not the case with Amazon. They had a warehouse for Pete's sake! When your entire business model relies on a vast network of warehouses, and you claim the one in TX "doesn't count", guess what chances are that isn't going to fly. Amazon knows this or they wouldn't be settling, they threw the dice and came up snake eyes, pay your bet and move on.
4/30/2012 5:37:23 PM
Yup...same story here in AZ. There is a huge Amazon depot here, and the state is trying to get several hundred million dollars from Amazon and will likely take it to court. My hope? Amazon just leaves the state. You want to charge us? OK, buy bye. How do you like 10,000 less jobs to help your gross budget deficit now?
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
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
Updated: LulzSec's Strikes Latest Victims -- Hacker Mag. 2600, FBI Affiliate
June 4, 2011, 8:28 PM
RIAA: Some of Limewire Piracy Suit Loot May Go to Artists
May 18, 2011, 8:25 AM
USAF Certifies First Aircraft for Biofuel Use
February 14, 2011, 10:23 AM
Netflix Announces 7-to-1 Stock Split, Eyes Explosive Overseas Growth
June 23, 2015, 8:18 PM
Sources: Hack on Fed. Database Lost 4.1M Social Security Numbers, Personal Info
June 11, 2015, 9:11 PM
The Big One: Chinese Hackers Steal Records of 4 Million U.S. Gov. Employees
June 4, 2015, 8:13 PM
Tutorial: Here's How to Force YouTube or Vimeo VIdeos to Embed as HTML5
June 3, 2015, 10:14 PM
Google Finally Fixes Maps Bug That Was Giving Racist, Profane Results
May 21, 2015, 1:43 PM
The Pirate Bay Loses Its Iconic Swedish Dot SE Domains
May 20, 2015, 6:31 PM
Most Popular Articles
F-16 Schools Trillion-Dollar F-35 in Mock Combat, Fleeing is Best Option Pilot Admits
July 1, 2015, 5:53 PM
Apple Music: The Money, The Launch Hiccups, and the Nitty Gritty Details
June 30, 2015, 5:09 PM
Apple iOS 8.4 Rolls Out w/ Fix to Crash-Causing Unicode Text
June 30, 2015, 3:24 PM
Windows XP, Vista Users Can Get Free Windows 10 Upgrade Thanks to Loophole
June 23, 2015, 2:23 PM
Quick Note: Lumia 940 XL "Cityman" Phablet Gets Teased Via Tests
June 29, 2015, 5:51 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
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
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information