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Texas slaps Amazon with $269M bill for uncollected sales taxes
TechFlash ^ | October 22, 2010 | Eric Engleman

Posted on 10/25/2010 9:44:06 AM PDT by epithermal

According to Amazon, last month the state of Texas issued the company an assessment of $269 million for uncollected sales taxes for a four year period from Dec. 2005 to Dec. 2009. Amazon says the assessment is "without merit" and says it intends to "vigorously defend" itself in the matter.

(Excerpt) Read more at techflash.com ...


TOPICS: Business/Economy; Chit/Chat
KEYWORDS: amazondotcom; irving; salestax; texas
Don't mess with Texas
1 posted on 10/25/2010 9:44:09 AM PDT by epithermal
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To: epithermal; 1riot1ranger; Action-America; Aggie Mama; Alkhin; Allegra; American72; antivenom; ...

Amazon.com has a brick and mortar or other physical presence within Texas?


2 posted on 10/25/2010 9:48:56 AM PDT by a fool in paradise (The establishment clause isn't just against my OWN government establishing state religion in America)
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To: epithermal; 1riot1ranger; Action-America; Aggie Mama; Alkhin; Allegra; American72; antivenom; ...

Amazon.com has a brick and mortar or other physical presence within Texas?


3 posted on 10/25/2010 9:49:50 AM PDT by a fool in paradise (The establishment clause isn't just against my OWN government establishing state religion in America)
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To: epithermal

http://www.statesman.com/business/texas-seeks-269-million-in-sales-tax-from-987685.html

Texas seeks $269 million in sales tax from Amazon
By Barry Harrell AMERICAN-STATESMAN STAFF

Published: 10:13 p.m. Friday, Oct. 22, 2010

snip
Amazon, which is based in Seattle, has a distribution center in the Dallas suburb of Irving.

Because of that physical presence, Amazon is supposed to collect sales taxes on transactions in Texas, under a 1992 U.S. Supreme Court ruling. But the world’s biggest online retailer has not done so in Texas.

Other companies with stores or other operations in Texas do collect tax on online sales, including Sears, J.C. Penney and Dell Inc.....

In a statement e-mailed Friday to the American-Statesman, R.J. DeSilva, spokesman for the comptroller’s office, said that Amazon “has requested a redetermination, which means this is an ongoing audit and could be decided as part of the administrative hearings process.”

DeSilva said state law prevented the comptroller’s office from commenting further as the investigation continues.

Amazon’s Irving facility has a taxable value of about $33 million, according to the Dallas Central Appraisal District’s website.

end snips


4 posted on 10/25/2010 9:50:11 AM PDT by deport (TEXAS -- Early Voting begins OCT. 18, 2010 (vote early and often)
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To: epithermal

let’s hear some more about how conservative texas is


5 posted on 10/25/2010 9:51:49 AM PDT by jjw
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To: a fool in paradise

They have/had a subsidiary owning a distribution center in Irving (I think). That subsidiary just happens to have the same corporate address as Amazon itself does. Amazon is walking on very, very thin ice on its claim that it doesn’t owe sales tax.


6 posted on 10/25/2010 9:51:51 AM PDT by KarlInOhio (Grblb blabt unt mipt speeb!! Oot piffoo blaboo...)
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To: epithermal

Amazon headquarters is based in Seatle, WA.

If a Texan goes to Seattle and purchases a hotel room, does he owe Texas taxes on that room? Or if he buys clothes, jewelry, rents a car, buys furniture, electronics or anything else? Nope.

If I order clothes through mail order, phone or have a friend ship me goods, no taxes are collected.

This sounds like nothing more than a state government shake-down, on a successful (and therefore ‘evil’) company.


7 posted on 10/25/2010 9:51:54 AM PDT by Hodar (Who needs laws .... when this "feels" so right?)
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To: a fool in paradise

They have a distribution center in Irving, according to the article.


8 posted on 10/25/2010 9:52:13 AM PDT by So Cal Rocket (We will remember in November)
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To: a fool in paradise

Yes the have a facility in Irving Tx and other states as well in which they don’t collect taxes.......

Snip
In a study last year, Michael Mazerov, a senior fellow at the Center on Budget and Policy Priorities in Washington D.C., found that Amazon has warehouses in at least six states in which it doesn’t charge sales tax on its own sales. “What Texas has done is evidence that the states are losing patience—particularly when there is very aggressive tax avoidance behavior like Amazon has exhibited with its warehouses,” he said.

Read more: http://online.wsj.com/article/SB10001424052702304354104575568512331020710.html#ixzz13HV50Dpi


9 posted on 10/25/2010 9:52:54 AM PDT by deport (TEXAS -- Early Voting begins OCT. 18, 2010 (vote early and often)
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To: epithermal
I see this:

The Texas Comptroller's Office has been looking at whether Amazon's distribution center in Irving, Tex. gives the company a physical presence, or "nexus," in the state, which would require it to collect sales tax, according to a series of reports in The Dallas Morning News.

Shouldn't the Comptroller determine whether there is merit BEFORE assessing taxes?

10 posted on 10/25/2010 9:53:07 AM PDT by a fool in paradise (The establishment clause isn't just against my OWN government establishing state religion in America)
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To: deport
Amazon, which is based in Seattle, has a distribution center in the Dallas suburb of Irving.

well, there you go, utterly destroying my argument, by introducing some essential facts. God Bless Texas. Go get your money, plus penalties.

11 posted on 10/25/2010 9:55:02 AM PDT by Hodar (Who needs laws .... when this "feels" so right?)
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To: KarlInOhio

If Texas is successful here, look for Amazon to only have distribution centers in states with no sales tax.

The Texas Controller will be successful in killing several hundred jobs in Irving, which will move to a 0% sales tax state.


12 posted on 10/25/2010 9:55:42 AM PDT by So Cal Rocket (We will remember in November)
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To: deport

Is this saying that Amazon should collect sales taxes for all 50 states?

Or just assess taxes on sales made to Texans?

I don’t see a problem if Texas wants a Texas company to collect taxes on products sold to Texans.


13 posted on 10/25/2010 10:05:28 AM PDT by Responsibility2nd (Yes, as a matter of fact, what you do in your bedroom IS my business.)
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To: epithermal

This is interesting.

Where does the actual sales transaction take place? Washington or Texas?

Buyers are supposed to self-report internet purchases. How does Texas know they haven’t already collected these taxes?


14 posted on 10/25/2010 10:05:32 AM PDT by IamConservative (Our collective common sense; the only thing a 1.5GPF toilet ever flushed on the first pull.)
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To: jjw
"let’s hear some more about how conservative texas is"

What does that mean?

15 posted on 10/25/2010 10:14:08 AM PDT by cweese (Hook 'em Horns!!!)
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To: So Cal Rocket

The whole state sales tax mess is a fiasco just waiting to happen. I work for an online retailer. For years state gov’ts have been threatening to tax ALL internet purchases. It would be a logistical and bookkeeping nightmare if we were to have to collect sales tax (at different rates for each state) from different states. And who would we pay that money to...would we have to send 50 checks to 50 states to meet the requirements. If the money is deposited in a “tax repository”...then who divides it up and decides how much each state gets.

We sell some of our products through Amazon but the sale is actually from us, we just pay Amazon a fee (akin to selling something on Ebay) so is Texas seeking to collect tax on the products that Amazon really isn’t “selling” in the truest sense of the word. For many companies they are more a broker, not an actual seller. Or does that mean that we have a physical presence in the states that Amazon has a physical presence? The definition of a “physical presence” is bound to get tricky in this day and age.

Some of the pressure on online internet retailers comes from traditional brick and mortar establishments. Well my company has a traditional brick and mortar showroom, but we have a website too. And for those retailers that are squawking that the internet offers unfair advantage, I say, get a website of your own and compete in ecommerce with the rest of us.


16 posted on 10/25/2010 10:15:27 AM PDT by dawn53
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To: dawn53
It's a bigger mess than you indicate. State sales taxes are bad enough, but you would ALSO be required to collect (and presumably account for and distribute) county and LOCAL sales taxes. At any rate, that's the way the law in the state of Missouri reads.

Just to make your day, Missouri has over 1800 taxing political subdivisions and special districts.

Talk about unworkable, jeez!

17 posted on 10/25/2010 10:19:59 AM PDT by SAJ (Zerobama -- a phony and a prick, therefore a dildo.)
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To: jjw

“let’s hear some more about how conservative texas is”

Must be all those Californians that moved there!


18 posted on 10/25/2010 10:20:23 AM PDT by Forty-Niner (Down the Donks! Revolution is Brewing. Make Babs Boxer a part of history....today!)
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To: Hodar

“If a Texan goes to Seattle and purchases a hotel room, does he owe Texas taxes on that room? Or if he buys clothes, jewelry, rents a car, buys furniture, electronics or anything else? Nope.”

The Texan didn’t consume or use the product in Texas so no, he should not owe taxes on it. If he buys something out of state then brings it into the state to consume then technically he owes taxes on the value of the goods unless it’s specifically exempted by state law. Buy a car out of state and then bring it to Texas and see how long you can get by without paying taxes on it.


19 posted on 10/25/2010 10:26:03 AM PDT by PeatownPaul
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To: SAJ

True, in my state, for instance, different counties have different sales tax rates. This already causes us issues in collecting taxes from our state alone...as you said, what if it was duplicated across 50 states.

Inconceivable!!!


20 posted on 10/25/2010 10:26:43 AM PDT by dawn53
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To: a fool in paradise

“”Amazon.com has a brick and mortar or other physical presence within Texas?””

As an owner of a bookstore for about 10 years whgo closed due to the online competition, this is a sore subject with me. Amazon should have been paying sales tax all along.

The reason, they have an agency program where they pay commissions to people who are located in those states. Thus they have representation and are therefor subject to the sales tax. I have gone through many sales tax audits with clients, even several out of state sales tax audits for in stae sales delivered out of state. The requirement is not a “bricks & mortor” qualification. It is representation.


21 posted on 10/25/2010 10:27:14 AM PDT by tired&retired
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To: Hodar
If I order clothes through mail order, phone or have a friend ship me goods, no taxes are collected.

That all depends. If you order on-line or via telephone (catalog), and the company has a brick-and-mortar presence in the state in which you reside, it is responsible for collecting sales tax on the purchase.

If not, then you are responsible, as most states have a use tax provision to accompany the sales tax. That is to say, if you bought something out of state, and didn't pay sales tax on it in your home state, and you use/consume the goods in your home state, you owe use tax on the goods to your home state. This is a generalization, as there are many factors used to make that determination, and your home state won't care if you knew the rules or not if you get caught. Most folks either ignore it, or are unaware of it.

22 posted on 10/25/2010 10:28:21 AM PDT by IYAS9YAS (Liberalism can be summed up thusly: someone craps their pants and we all have to wear diapers)
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To: a fool in paradise

you start the tax collection process in order to force the determination of its validity


23 posted on 10/25/2010 10:29:55 AM PDT by PeatownPaul
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To: jjw

“let’s hear some more about how conservative texas is”

“Flyover country” in Texas is VERY conservative. The problem is Rat infestation in a few of larger cities and wherever illegals congregate.


24 posted on 10/25/2010 10:30:10 AM PDT by TexasRepublic (Socialism is the gospel of envy and the religion of thieves)
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To: epithermal

Amazon has known this fight was coming for a long time. I’m sure they are ready for it.

I have to say though that one of the main reasons I often buy from Amazon is to avoid sales tax on bigger ticket items. I live in Missouri but I’m sure sooner or later my state will target Amazon on some pretext.


25 posted on 10/25/2010 10:33:56 AM PDT by Artemis Webb
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To: PeatownPaul

“If a Texan goes to Seattle and purchases a hotel room, does he owe Texas taxes on that room? Or if he buys clothes, jewelry, rents a car, buys furniture, electronics or anything else? Nope.”

The real question here is hwere did the sale take place.

There are several factors to consider:
1. Where was the order place?
2. Where was it shipped from?
3. Was it shipped by common carrier or private carrier?
4. Does the seller have representitives in the recipient state?
5. Is the object sold subject to “use tax” by the purchaser?

These are just a few...


26 posted on 10/25/2010 10:34:57 AM PDT by tired&retired
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To: jjw
I don't think this is about being Conservative, its about being fair. Why should a retailer in Texas be penalized by having to charge sales tax while it's customers can go on-line and order the same product tax free. In my opinion, Internet sales cost a lot more jobs than they create.
27 posted on 10/25/2010 10:36:13 AM PDT by martinidon (It's The Spending Stupid)
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To: tired&retired

Rhino (Warner Bros.) charged me 13% sales tax to a shipment in Texas. Our sales tax tops out at 8.25%.

Think they hit me for Texas AND California sales tax?

I asked them for the justification for this rate that exceded Texas’ own but they gave no response.


28 posted on 10/25/2010 10:38:54 AM PDT by a fool in paradise (The establishment clause isn't just against my OWN government establishing state religion in America)
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To: a fool in paradise

T””hink they hit me for Texas AND California sales tax?””

Legally they can’t.. But California has the biggest sales tax pricks of all the states. They even won a case to tax religious materials.... Businesses give in to them rather than argue with them. The sale cannot take place in two places at the same time.


29 posted on 10/25/2010 10:44:44 AM PDT by tired&retired
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To: dawn53

It’s not that much of a nightmare. Back in the pre-internet mail order days the rules were simple and followed by most companies: if they had a physical presence in the state they had to pay sales tax there for orders that stayed within the state, which meant they charged customers who lived in those states sales tax. If you remember old mail order forms they always had these lines in the math part of the form that said stuff like “residents of FL, AZ and OH add 5% sales tax”.

For whatever reason when internet retail started up everybody pretended that they weren’t mail order and didn’t have to follow the same rules as the Sears Catalog. The fact is they are mail order and have to follow the same rules, and since they could manage to pull it off in the pre-computer days I’m betting it won’t be that hard in the computer days. Really all you need to do is know what states you have a physical presence in, know their sales tax, and if the billing address of the orderer is in one of those states apply the sales tax. It’s like 1 SQL table and 1 query.

As for resellers, if Amazon is smart they have in the terms of service that the business has to handle their own legal stuff. But they need to follow the sames rules, if your business running through Amazon has a physical presence in a state and the orderer is also in that state you need to pay the sales tax. You don’t have to pass the bill on to the customer, but you still gotta pay.


30 posted on 10/25/2010 10:48:09 AM PDT by discostu (Keyser Soze lives)
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To: discostu
This whole argument...would cease, if we just had a consumption tax...nation wide.

And of course eliminate the Income Tax.....

I can dream......................

31 posted on 10/25/2010 10:52:10 AM PDT by Osage Orange (MOLON LABE)
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To: Osage Orange

No it wouldn’t. Unless that national consumption tax somehow outlawed individual state level sales tax.


32 posted on 10/25/2010 10:53:36 AM PDT by discostu (Keyser Soze lives)
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To: discostu

Not so easy, as I said, with different counties having different sales tax, within the same state. Here’s Florida’s 67 counties and you’ll see, not a uniform sales tax. We do collect to things sold within our state, just saying if we have 49 other states with similar variations in sales tax to FL, then it’s going to get “very interesting.”

http://miami.about.com/od/governmentcityservices/a/salestax.htm


33 posted on 10/25/2010 10:55:55 AM PDT by dawn53
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To: discostu
Ack! You are right, of course.

And the last thing we would want is the the Fed's deciding who got what...from a National Consumption Tax...

Okay...so what's your answer?

34 posted on 10/25/2010 10:57:51 AM PDT by Osage Orange (MOLON LABE)
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To: dawn53

Nope very easy, mail order companies only have to worry about state sales tax, cities and counties get stiffed. You would only have to worry about 49 other states if you had a physical presence in those states, and even then you wouldn’t have to worry about cities and counties.


35 posted on 10/25/2010 11:14:47 AM PDT by discostu (Keyser Soze lives)
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To: Osage Orange

The answer in this case is that 15 years ago somebody should have “explained” to the internet retailers that they were mail order companies and had to follow all the same tax laws as Sears, Finger Hut and AMO. This has been a long time coming.


36 posted on 10/25/2010 11:16:21 AM PDT by discostu (Keyser Soze lives)
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To: Responsibility2nd

It would be just on sales made to Texas addresses....


37 posted on 10/25/2010 11:18:08 AM PDT by deport (TEXAS -- Early Voting begins OCT. 18, 2010 (vote early and often)
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To: a fool in paradise

In Irving (DFW), talk of one in the Houston area too.


38 posted on 10/25/2010 11:33:44 AM PDT by PeaceBeWithYou (De Oppresso Liber! (50 million and counting in Afghanistan and Iraq))
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To: jjw

If they owe it and don’t pay it then that makes them conservative? Demanding what they owe be paid is liberal?

You have things a bit mixed up there feller.

Or is it just jealousy rearing it’s ugly head?


39 posted on 10/25/2010 11:35:28 AM PDT by Eaker (Pablo is very wily)
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To: a fool in paradise
Amazon.com has a brick and mortar or other physical presence within Texas?

Never heard of one. But this is about money, honey. And you know how that goes.

40 posted on 10/25/2010 12:34:04 PM PDT by lentulusgracchus
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To: PeatownPaul
The Texan didn’t consume or use the product in Texas so no, he should not owe taxes on it.

Oh, yeah? Just buy a car in Seattle and see if Texas doesn't tax it the minute you drive it into Texas.

States abuse the tax power all the time -- and the Constitution.

41 posted on 10/25/2010 12:39:38 PM PDT by lentulusgracchus
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To: Eaker

guess i’ll read the article next time


42 posted on 10/25/2010 1:15:11 PM PDT by jjw
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To: epithermal
The executives at Amazon are actively hostile to America. I do not do business with them.

I think it's just cute that these guys who think we should all be ruined with taxes doesn't want to pay them.

43 posted on 10/25/2010 4:06:07 PM PDT by Mamzelle (donate to O'Donnell--even a dollar is plenty! She has paypal!)
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