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Texas sends Amazon a $269M uncollected sales tax bill
- smackfu 16y agoYou wonder how Texas would even know what amount to bill. That works out to $4.3 billion dollars in sales at a 6.25% tax rate.
- jrockway 16y agoOr it could be a $269MM fine on top of a one cent tax bill.
- MrFlibble 16y agoYou know things have gotten bad when that actually sounds like a feasible possibility.
- lrm242 16y agoBecause the state audited Amazon. FTFA: "Amazon.com was audited for sales tax covering the time period of December 2005 to December 2009. They were assessed a liability and billed in August 2010. The company has requested a re-determination which means this is an ongoing audit and could be decided as part of the administrative hearings process. The company would send documents and this process will continue."
- smackfu 16y agoHey, that wasn't in the article when I read it!
- smurfpellet 16y agoeverything's bigger in Texas
- rdzah 16y agoLooks like amazon needs to hire google's accountant.
- wmf 16y agoGiven that Amazon was founded in Seattle for tax reasons, I suspect Bezos is just as smart as Google in this case.
- Semiapies 16y agoYep. I suspect the state's claim won't stand when it's all hashed out, but that'll probably be after the next election...
- lrm242 16y agoAmazon will undoubtedly settle. Texas is trying to close a budget short fall for the next cycle that begins in 2011. Amazon has a distribution center in Texas and Texas believes that means they have a nexus of operations. Amazon disagrees. Texas wants/needs money and Amazon certainly doesn't want the court to rule that they are subject to paying sales tax because their distribution constitutes sufficient operations to conclude they do business in Texas. Therefore, my prediction: settlement.
- dhyasama 16y agoIf they settle isn't that admitting they have a nexus in Texas (love saying that) and will have to collect sales tax going forward?
- jdc 16y agoThey'd only admitting that settling costs less than winning or losing a lawsuit.
- drawkbox 16y agoGood way to help the decision for Amazon where the next distribution center will be built, not in Texas. They are already getting jobs and tax revenue from employees there. They should change Texas to Taxes.
- johngalt 16y agoImmediately suspend sales to anyone in the state of Texas.
- Kaizyn 16y agoThat won't help with the ongoing litigation. It won't even put pressure on the state officials. It would just cut into Amazon's existing business with people in the state.
- TGJ 16y agoYou've got the name but it doesn't seem you have the philosophy that goes with it.
- qq66 16y agoThe "hardball" approach isn't always the best. If you play hardball and lose, you permanently lower your power and influence.
- vdm 16y agoWhere can I sign up for your newsletter?
- johngalt 16y agoI agree and the comment was mostly tongue-in-cheek. But it does make you wonder about local legislative bodies, and their jurisdiction. Let's say tomorrow some country decides that any website their citizenry has access to is taxable. At what point does a company just say "not worth it". That decision would have a more to do with the wealth and power of the country than objective merit of the claims.
- DevX101 16y agoThese are the warning shots. As commerce increasingly goes to the web, hungry states will be tapping more companies for a piece of the action.
- potatolicious 16y agoI can't help but be sympathetic to local businesses though - lack of sales tax probably pushes a lot of their former customers towards online shopping; and to be fair, it is an unfair playing field (after all, the brick and mortars can't very well stop charging sales tax). I for one order all of my expensive hardware from out of state...
- marze 16y agoIsn't interstate commerce non-taxable, as per the constitution?
- jws 16y agoAs long as there is more than one lawyer on the planet it won't be that simple. Amazon has fulfillment centers in Texas and a subsidiary as well. This may be sufficient to trigger Texas' state sales tax laws.
- Figs 16y agoI wonder how long it will be before all the data centers move to places like the Bahamas...
- lfittl 16y agoThough I'd clearly separate data centers and fulfillment centers. Much harder to ship from the Bahamas ;)
- Tangurena 16y agoNew York is one of the states that treats co-lo as enough of a presence to trigger the "you must now collect sales tax" requirement. I think TN is another. However, in this case Amazon had at least one warehouse and at least one office in TX.
- Kaizyn 16y agoThe states get around this by insisting that companies doing business in their state must collect sales tax on state residents.
- jhgfdsahgf 16y agoEasy way around it - all deliveries to Texas are shipped from an Amazon warehouse in New mexico and, deliveries in NM are shipped from Arizona etc. All the orders are taken by Amazon Bermuda.
- deleted 16y ago[deleted]
- Bricejm 16y agoThis can be difficult to explain. Sales tax or 'Sales and Use tax 'SUT' is the responsibility of the customer not the vendor. I'm an accountant and often a small business will send us a bill that doesn't include sales tax. Some things are exempt from sales tax, but some things are not. It's up to us to decide if we need to 'assess' ourselves sales tax based on the service/product that we received. We send a check to the government for the sales tax the vendor didn't charge us. When we're audited this is one of the big issues that we need to provide documentation. It seems to be a concept that's turned around, but it's up to the customer to make sure the tax is paid, not the vendor. Although it is different state to state. The only way I see Amazon liable for sales tax is through the purchase of their inventory, not the actual sales to customers like us, although it is normally assumed that large corporations charge sales tax and there might be a tax law that says just that. I looked at my last Amazon order and I wasn't charged sales tax, so I'm not sure how Amazon gets around this.
- slantyyz 16y agoI'm neither an accountant nor an American, but I thought that e-commerce was a grey area with respect to sales taxes in the US. Most e-commerce companies didn't charge sales tax outside of the state they operated in. During the dotcom days I was assigned to research the implications of interstate transactions, and honestly, all that nexus stuff was dizzying. I only recall hearing periodically (every couple of years) that the ecommerce sales tax moratorium (if you can call it that) had been extended yet again. Is that still the case?
- smackfu 16y ago"Sales tax or 'Sales and Use tax 'SUT' is the responsibility of the customer not the vendor." Wouldn't that imply that a vendor could just not charge sales tax and not be fined for it? Which doesn't seem right.
- Bricejm 16y agoI'm not quite sure what makes the difference. I'm sure there are laws for large corporations vs. a small business. All I know is when our corporation isn't charged sales tax on a non-exempt item, it's our responsibility to pay the sales tax, even though we were the customer.
- ck2 16y agoI bet chains like Walmart are somehow behind this if you look behind the curtains.
- AndyKelley 16y agoAmazon provides a fantastic service that millions of customers enjoy. Can we just leave them alone to keep making our lives easier, please?
- dualogy 16y agoBut the govt needs funds to make your lives harder, don't you see? It's that old yin-yang thing.
- binarymax 16y agoWhen did the Texas "nexus" law come into effect? I thought it was just passed this year, so surely this makes their attempt at collection ex post facto?