Amazon and Texas: Round 2?

Posted by accountingweb on Feb 15 2011 1579 printer friendly

A few months ago, Texas made an audit assessment against Amazon for $269 million in uncollected sales tax. Texas claims Amazon has nexus in Texas because it has a distribution facility in Texas. Amazon claims having a distribution facility is not enough to have nexus.

Last week, Amazon served notice that it will be closing its facility in Texas in April. It did have plans to expand in Texas, but now claims Texas's nexus laws are causing it to withdraw from Texas all together.

Now, I am normally a strong advocate for taxpayers; however, in this case, based on the facts and current Texas nexus standards, I believe Amazon has nexus and should be collecting sales tax.

With that said, based on other articles on the web, the Texas Governor is unhappy with the Texas Comptroller's position and Amazon's withdrawal from Texas. Therefore, maybe Texas will consider changing its nexus standard just to make Amazon happy? If it doesn't change its standard, but relieves Amazon from sales tax collection responsibilities, what does that mean for other similarly situated taxpayers? What do you think?Check out these articles for more info:Texas TribuneColumbia Journalism ReviewBusiness Insider

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