Texas Hits Amazon With Big Sales Tax Bill

The state of Texas delivered a $269 million sales tax bill to Amazon.com, Inc for sales taxes that the state claims were not paid by Amazon between December 2005 and December 2009.

In its most recent 10Q filing, Amazon claims that Texas didn’t provide “sufficient basis” for its calculations of sales taxes. For its part, Amazon said that they are prepared to defend themselves against the claims by Texas.

With state tax revenues on the decline resulting from everything from lower sales tax revenues generated by lower consumer spending, to lower property tax collections resulting from a combination of foreclosures and depressed housing values and lower income taxes from unemployment, many states have stepped up their focus on Internet sales tax collections.

Texas does not have a state income tax and has relied on oil-industry tax revenues.

Texas conducted an audit of its retailers including Amazon. The audits by Texas are supposed to identify which companies have the required physical presence or “nexus,” in the state that would require companies to collect and remit sales tax.

A 1992 Supreme Court ruling found that direct-to-consumer retailers can be required to collect and remit sales tax only in states where they maintain a physical presence with facilities such as stores and distribution centers.

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Posted by John Timmons on Oct 25 2010. Filed under Business News, Featured News, Marketing News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.