Amazon, Texas, reach sales tax deal

Posted on Apr 28, 2012 in Business | 0 comments

Texas Comptroller Susan Combs said the state has reached a tax agreement with Amazon.com to bring the Internet retailer in line with sales tax laws.

The company agreed to provide 2,500 jobs and invest $200 million in capital projects in the state. Amazon.com, which is based in Seattle, also agreed to begin collecting sales tax on items sold to Texas residents starting July 1.

Combs said the agreement pushed the start date on tax collections far ahead of other states, which have negotiated deals with Amazon.

Nine months prior, the Texas Legislature rejected a deal that would have guaranteed 6,000 Amazon jobs in the state and $300 million in capital investments, the Austin American-Statesman reported Saturday.

That deal would have given Amazon four and a half years before it began collecting sales tax for the state.

Amazon had revenues of $48.1 billion in 2011 but has stonewalled states on sales tax for years.

Local retailers have complained Amazon is allowed to offer customers a discount simply by avoiding sale tax that in-state businesses must charge.

Amazon also agreed to settle previous tax disputes with the state, which includes a $269 million assessment for unpaid sales tax accrued from 2005 through 2009.

For the new deal, “They came to us,” Combs said. “They came in, there was a preliminary meeting, and then there was a meeting with an individual, Mr. Misener, (Amazon's vice president of global public policy), and then basically it was hammered out by email and fax over about a four- or five-day period. Just the details; the framework was settled in this meeting face to face.”

Amazon “looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs working with us to advance federal legislation,” Misener said in a statement.

Other Internet giants remain opposed to compliance with state sales tax laws, but Amazon has dropped its opposition to a federal statute on the issue.

Copyright 2012 by United Press International