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message 1: by Brakedrum (new)

Brakedrum | 1203 comments Today's newspaper:
Online retail giant Amazon.com is closing its Irving distribution center and scrapping plans to expand Texas operations after a dispute with the state over $269 million in sales taxes, it told employees Thursday.

Dave Clark, Amazon's vice president of operations, wrote in an e-mail that the center will close April 12 due to the state's "unfavorable regulatory climate."

The company is also canceling plans to build additional facilities in Texas that would have brought "more than 1,000 new jobs and tens of millions of investment dollars," Clark wrote. Amazon spokeswoman Mary Osako would not say how many employees are at the Irving facility. Texas employees will be offered positions in other states, Clark said.

The state contends that Amazon is responsible for sales taxes not collected on online sales in the state. Last year, the comptroller's office demanded $269 million in uncollected sales taxes. Amazon responded by suing the state, demanding it produce the audit that generated the figure.

"We regret losing any business in Texas, but our position hasn't changed: If you have a presence in the state of Texas you are required to pay sales tax, just like any other business that has a presence in Texas," said Allen Spelce, a spokesman for Comptroller Susan Combs.

Texas loses an estimated $600 million in Internet sales taxes every year, Spelce said.

"Despite much hard work and the support of other Texas officials, we've been unable to come to a resolution with the Texas comptroller's office," Clark wrote.

A number of states, including New York and North Carolina, have sued Amazon seeking sales taxes on online purchases made from within their borders. In 2009, Amazon cut ties with affiliates in Rhode Island, North Carolina and Hawaii over the issue.

Last month, North Carolina tax collectors settled a privacy lawsuit, agreeing not to ask Amazon or other online retailers to reveal specifics about Internet purchases made by North Carolina residents. The state's attorney general confirmed the settlement this week.

"The lawsuit on this particular issue could have been avoided altogether if not for the aggressive stance Amazon took to avoid compliance with North Carolina's tax laws," state revenue officials said in a statement. "There would have never been an issue of customer privacy if Amazon would simply collect the North Carolina sales tax that others already do."

National studies put the amount of uncollected taxes at $7 billion a year as states look at multibillion-dollar budget gaps.

Amazon, with $25 billion in sales last year, had operated the center in Irving since 2006. It argued that a subsidiary company owned it. Texas audited Amazon after a Dallas Morning News report questioned whether the retailer was complying with state law.

Texas is one of six states where Amazon has been distributing products but not charging sales tax, The Seattle Times reported last month. The others are Arizona, Indiana, Nevada, Pennsylvania and Virginia.

This report includes material from The Associated Press, Bloomberg News, The Dallas Morning News and McClatchy Newspapers.



Read more: http://www.star-telegram.com/2011/02/...


message 2: by Dan in AZ (new)

Dan in AZ | 2647 comments I don't know how long a time period Texas claims the $269M accrued over or what Texas' sales tax is, but even at 5% Amazon would have had to have over Five Billion in sales. I'd be asking for a recount too.


message 3: by Ann (new)

Ann (annrumsey) | 14396 comments It looks like fours years worth of taxes for the Texas case, Dan. Amazon is negotiating with Tennessee to add to the package deal of investor economic perks previously negotiated to include no requirement to have sales tax collections for transactions from a pair of new distribution centers set to open in 2011 in this state.
http://seattletimes.nwsource.com/html...


message 4: by Brakedrum (new)

Brakedrum | 1203 comments Ann, thanks for the article. This really is interesting.


message 5: by Brakedrum (new)

Brakedrum | 1203 comments Texas state sales tax:
State Sales and Use Tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable services.

Texas cities, counties, transit authorities and special purpose districts have the option of imposing an additional local sales tax for a combined total of state and local taxes of 8 1/4% (.0825)


message 6: by Ann (last edited Feb 12, 2011 09:41AM) (new)

Ann (annrumsey) | 14396 comments There have been quite a few full page ads against granting the no Tennessee state sales tax deal in local newspapers recently from the NRF (National Retail Federation) and local retailers groups. I kind of like saving almost 10% myself. Our sales tax including local taxes is .0925.
I think it is a shame that they are closing up in Irving though. That loss of jobs is a big hit I imagine.
Interesting only to me. I get most of my Amazon purchases through the Lexington KY facility where they apparently do collect taxes from KY residents. (per the map from this link showing where they collect taxes) http://seattletimes.nwsource.com/html...

Brakedrum wrote: "Ann, thanks for the article. This really is interesting."


message 7: by Melodie (new)

Melodie (melodieco) | 3604 comments Ann wrote: "There have been quite a few full page ads against granting the no Tennessee state sales tax deal in local newspapers recently from the NRF (National Retail Federation) and local retailers groups. I..."

When I buy stuff from Amazon for my mom & dad I always get hit for sales tax as the stuff always ships from the Lexington facility.


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