Amazon Pulling Out of Texas Over $269 Million Tax Bill

ralphart writes with this excerpt from the Dallas Morning News: "As a result of an ongoing tax dispute with Texas, Amazon.com has decided to take its ball and go home. The online retailer said Thursday that it would shutter its Irving distribution facility April 12 and cancel plans to hire as many as 1,000 additional workers rather than pay Texas what the state says is owed in uncollected sales tax. Texas wants $269 million from Seattle-based Amazon in past-due sales tax. It sent the bill to the company last October." We've discussed the online retailer's tax battles with other states in the past.

Comments

Re:They still owe texas money.

[Mr. Slippery]

Texas needs to cut some sort of compromise deal with Amazon or they will lose out in the long run

No, if every state stood up to parasites like Amazon, they'd go out of business, leaving the field clear for thousands of small businesses to spring up. That's the long-term win, not kowtowing to corporate bastards.

Re:Enough of this

[natehoy]

IANAL, but I've done a lot of tax programming for major retailers over the years.

While I agree that sales taxes are ridiculous and hard and all that, I feel it's important to point out that Amazon actually has a presence in Texas, and therefore when they sell product to Texans they actually do need to be collecting sales tax and remitting it to the State of Texas. This is commonly known as "nexus" in sales/use tax circles. This is what Texas is asking for - sales/use tax from sales to Texans from Amazon (who has a presence in Texas and is therefore subject to the laws of Texas with regards to their sales in Texas).

If Amazon was being told they needed to collect on behalf of, for example, Maine, they have the absolute right to tell Maine's comptroller to go straight to hell. In fact, as a citizen of Maine, I'd love to be able to listen to that conversation. I'll never be able to tell our comptroller to go to hell, so it'd be great to be able to hear someone else say it.

Amazon has no presence here in Maine, therefore they have no obligation to follow Maine's regulations surrounding sales/use taxes, which are intrastate law, not interstate. The sales/use tax on things I buy from Amazon is my responsibility to track as a Mainer doing business with a company outside the state, and I owe that money to Maine at the end of the year (and we have a system called "Alternative Use Tax" where I pay a small stipend based on income tax to cover any incidental out-of-state purchases I happen to make if I don't want to track them all, which I use).

But Amazon has a presence in Texas. In the same way that the company I currently work for has to start collecting and remitting State sales taxes every time we open our first store in each State (or call center, or warehouse, or business office, or whatever), Amazon really does owe that sales tax to the State of Texas, whether they have been collecting it from their customers or not.

Now, they can certainly choose to pull out of Texas in order to avoid having to collect taxes there, that's within their rights. But they still owe the State of Texas $269 million (plus whatever other sales they make before they finish the pullout), because they were supposed to be collecting that money from their customers who live in Texas for the entire time they've had a presence there.

Note to Amazon: Please come to Maine. We could use the jobs. I'll happily pay sales tax on purchases made from you.