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Companies are only required to pay state sales tax if they have a physical presence in that state. Amazon wasn't bluffing, Texas was. We went through the same
by tsotha 14y ago
Companies are only required to pay state sales tax if they have a physical presence in that state. Amazon wasn't bluffing, Texas was. We went through the same thing in California. Amazon agreed to pay the sales tax, but only after it had decided to open distribution centers in the state.
- fsckin 14y agoAmazon has had a continuous presence in Texas from 2005 onward. Distribution center operated in Irving, TX from 2005 through 2011. Woot, in Carrollton, TX was acquired in 2010.
- tsotha 14y agoWell, if that's the case they have to pay, legally.
- Kadin 14y agoI think the distribution center was owned indirectly, through some sort of holding company; that was the linchpin of their whole argument. Woot was probably just one of the things they were threatening to close down and move out of state if Texas didn't give them a break. And I'm sure they had an argument ready as to why Woot wasn't a tax nexus for Amazon as a whole; there's a lot of really arcane rules that go into determining nexus. The real losers at the end of all this are going to be the tax-free states, who ended up getting a lot of Amazon (and other mail-order retail) business because putting a warehouse there wouldn't risk triggering taxation. But if the tax loopholes are closed, there's not a lot of reason to set up shop there. They are going to be the losers in the end, I think.