Amazon May Pay Texas Sales Tax

Aron Schatz
May 13, 2008

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This is not due to Texas passing a new law. Amazon operates a distribution center in Texas (under the guise of a different company). Based on current law, they should charge Texas sales tax to residents in that state.


Texans who shop to avoid paying sales taxes may not have that luxury for long. The Texas Comptroller's Office is investigating whether the Internet retail behemoth, with sales last year of $14.8 billion, owes Texas possibly millions of dollars in uncollected sales taxes on purchases made by its customers in the state. Seattle-based has been operating a distribution center in Irving since 2006, giving it a "physical presence" in Texas, a longstanding litmus test for when sales taxes must be collected by an online or mail-order company. The issue came to light last month after Inc. sued the state of New York over whether it should begin charging customers state sales taxes, citing the federal law it appears to be breaking in Texas.

Can't go both ways, Amazon!


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