Blog 7

Amazon.com starts collecting Texas sales taxes in July according to agreement with Comptroller Combs

By:Maria Halkias/Reporter -mhalkias@dallasnews.com  |  Bio

After reading the article I had a flash back to one of the class lectures referring to the possibility of Amazon.com having to pay taxes and the effect that it would have on consumers and the State Revenue. 
         The comptroller's office had estimated that Amazon owed the state $269 million in uncollected sales taxes from 2004 to 2009 and penalties. In addition to operating a distribution center that closed, Amazon owns Carrollton-based Woot.com.  One would have to wonder how and why it took the Comptroller five years to try and collect the taxes owed?

The agreement reached with Texas Comptroller Susan Combs and Amazon.com indicates that it will begin to collect and remit Texas sales tax on July 1, 2012.  Combs and Amazon.com said today the agreement will "lead to the creation of thousands of new jobs in Texas by the online retailer."  As part of the deal, Amazon plans over the next four years to create at least 2,500 jobs and make at least $200 million in capital investments in the state.

After reading Amazon Plays Dumb in Internet Sales Tax Debate,  published back on February 13, 2008, I was able to understand Amazon.com arguments for not wanting to pay taxes on goods purchased online.  According to the Supreme Court ruling of 1992, Amazon was required to collect taxes from their customers when a purchase is made; however, Amazon argued that the costomers that purchased the item owed the taxes. Some have argued that electronic commerce would be hampered by additional tax burden. Who would determine which State taxes would be owed and which calculations rates would be appropriate as well.  This problem was resolved by Walmart.Com when selling items in various places and collecting taxes by following each States rules.  Other distributors were not as successful with handling the dispute over who should or should not collect taxes.

 A distribution center was closed by Amazon.com in Irving a year ago due to the dispute over whether it should collect sales taxes in Texas.  Now this agreement resolves all sales tax issues between Texas and Amazon. This is an important step in the leveling the playing field. It hasn’t been determined where Amazon would open it's new facilities; however, speculations are that the distribution center placement will be located in the highest sales tax collections areas like Dallas and Houston.  Texas will have the ability to obtain all the sales tax revenue.  Combs, feels that congress should enact federal legislation that will give states access to revenues that are due.

Although this appears to be a positive for the State of Texas, several Amazon customers are not so happy. After reading their comments many will opt to take their business else were. Many simply don’t want the extra expenses of sales taxes on top of shipping and handling fees. To them this is not such a great deal after all. The idea of getting the same product from a local retail store for the same price is clearly outweighs having to wait 2-3 days for delivery. 
          
        The message from the Amazon customers’ is clear, “the reason for shopping online is convenience and saving money.

Take your sales tax and Shove It!

I agree with Comb's actions requiring Amazon.com to except the responsible of collecting and remitting Texas sales tax.