Amazon backs down in Texas sales tax fight

by Chuck May 04, 2012

sales tax fight

sales tax fight to collect sales tax in Texas settles lawsuit over collecting sales tax in Texas lost the sales tax fight with Texas and has agreed to a settlement which, among other concessions, says they will begin collecting sales tax on all purchases made by Texas residents starting July 1, 2012.

Amazon has agreed to drop the threat to relocate their Texas-based warehouse and to create 2,500 new jobs in the state. They will also make $200 million in capital investment in Texas over a four-year period.

Texas has agreed to “forgive” the $269 million in unpaid taxes the state said Amazon owed.

Paul Misener, Amazon’s vice president of Global Public Policy said “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.”

Amazon’s new-found support for Sen. Dick Durbin’s (D-Ill.)  Main Street Fairness Act, makes greater sense as more and more states continue to bring multi-million dollar lawsuits against the company.

Currently, Amazon only collects sales tax in Kansas, Kentucky, New York, North Dakota and Washington. Starting in July, 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.


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