Business
11:29 am
Fri April 27, 2012

Amazon to Start Paying Texas Sales Tax

After talks between online retailer Amazon.com and the state over paying sales taxes collapsed last year, the parties have reached an agreement.

The Office of the State Comptroller and Amazon stated today that beginning in July, Amazon – which had a distribution center in Irving, Texas – will begin paying state sales tax.

Amazon also announced it will “create at least 2,500 jobs and make at least $200 million in capital investments” in Texas, over the next four years.

Comptroller Susan Combs expounded on the agreement:

We thank Amazon for partnering with us to find a solution that works for our state. This is an important step in leveling the playing field in Texas; however, Congress should enact federal legislation that will give states access to revenues that are already due, which would resolve this issue fairly for all retailers and all states.

Here's Amazon Vice President of Global Public Policy Paul Misener:

Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs working with us to advance federal legislation. 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.

Earlier this week, KUT News spoke with the Texas Tribune's Ross Ramsey, who noted that because Amazon had maintained a distribution center in Irving, that physical presence in Texas makes them responsible for collecting taxes from their customers.

“The real issue is that a lot of retailers who do have operations in the state, and who do collect sales taxes, look at retailers like Amazon, Overstock and E-Bay and say, ‘Look, if they’re able to sell this stuff and not collect an eight percent tax and we’re selling it and having to collect that tax, they’ve got a price advantage and that’s not fair. '"

Combs had previously waded into the Amazon sales tax debate, presenting the retailer with a back tax bill totaling $269 million. But the move sparked a standoff, and accompanying legislation that would have boosted online sales tax collection was vetoed by Gov. Rick Perry last year.