The State of Texas vs. Amazon

by LeeLee

Posted: 14 years ago 21 replies

INTERNET MARKETING

Texas Sends Amazon a $269 Million Sales Tax Bill

By SARAH WEINMAN
Posted 9:25 AM 10/25/10

As states grapple with increasingly squeezed budgets, one simmering battle -- trying to collect sales taxes from retailing behemoth Amazon (AMZN) -- has heated up considerably over the past year. The jury's still out on how much money states like Rhode Island and North Carolina (which is thick in litigation with Amazon over this very issue) will get from online sales-tax initiatives. But Texas has issued its own bill to Amazon -- to the tune of $269 million.
<snip>

See full article from DailyFinance: Texas Sends Amazon a $269 Million Sales Tax Bill - DailyFinance

Maybe the US should drive even more business off shore?

#amazon #state #texas

danicat 14 years ago

Originally Posted by precious007

Shall they pay if they have to.

I mean how can such a large
company like Amazon run away
without paying its taxes.

Its actually us Texans who didnt pay. Amazon just didnt collect it, so since they didnt collect it, we the end purchasers in Texas should have paid it.
- [ 1 ] Thanks
{{ DiscussionBoard.errors[2772701].message }}

GarrieWilson

14 years ago

I think Amazon needs to start collecting taxes since they have/rent a warehouse/distribution center there.

Of course I also think it's crappy how Google skips out on it's tax bills too.

Thanks
2 replies

Signature

Screw You, NameCheap!
$1 Off NameSilo Domain Coupons:
SAVEABUCKDOMAINS & DOLLARDOMAINSAVINGS

{{ DiscussionBoard.errors[2772711].message }}

affenpinscher

14 years ago

Who makes the laws that allow Google to go overseas and avoid paying taxes?
Our 'esteemed' Congress.

There's no point in blaming companies for taking advantage of the laws. Don't you deduct everything the law allows you?

The only people who deserve censure are the administration and Congress.

[ 1 ] Thanks
1 reply

Signature

In Dog Beers
http://www.amazon.com/s/ref=w_bl_sl_...xtbin=DaisyDog

{{ DiscussionBoard.errors[2772736].message }}

GarrieWilson

14 years ago

Originally Posted by affenpinscher

I don't blame Google for doing it. I think it's crappy *how* it's done. That the fed *allows* it.

Thanks

Signature

Screw You, NameCheap!
$1 Off NameSilo Domain Coupons:
SAVEABUCKDOMAINS & DOLLARDOMAINSAVINGS

{{ DiscussionBoard.errors[2772762].message }}

Black Hat Cat Banned 14 years ago

Originally Posted by GarrieWilson

I think Amazon needs to start collecting taxes since they have/rent a warehouse/distribution center there.

If that's true, they're probably screwed.
- Thanks
- 2 replies
{{ DiscussionBoard.errors[2773311].message }}
- GarrieWilson 14 years ago
  
  Originally Posted by Black Hat Cat
  
  If that's true, they're probably screwed.
  
  According to the article, Amazon has a subsidiary that is formed in Kentucky and they own the warehouse/disto center. I think they are outsourcing to the KY company (owned by Amazon.com) for distribution.
  
  I wonder if the KY company owns the products being shipped and wholesale them to Amazon.com then could they get off? Kinda like the KY company being a dropshipper.
  
  -
  
  Thanks
  
  Signature
  
  Screw You, NameCheap!
  $1 Off NameSilo Domain Coupons:
  SAVEABUCKDOMAINS & DOLLARDOMAINSAVINGS
  
  {{ DiscussionBoard.errors[2773508].message }}
- FranciscoDancon 14 years ago
  
  If I were in charge at Amazon I'd move my warehouse out of the state of Texas to somewhere just across the border.
  
  [ 1 ] Thanks
  
  {{ DiscussionBoard.errors[2773884].message }}

Hugh 14 years ago

The fed almost forced it.

Hugh
- Thanks
Signature

"Never make someone a priority in your life who makes you an option in theirs." Anon.
"Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon." -- Winston Churchill
{{ DiscussionBoard.errors[2772822].message }}
FranciscoDancon 14 years ago

Yeah I think the state of Texas is dead wrong. Of course, I don't believe people should have to pay a tax to the state for the privilege of engaging in commerce.
- Thanks
- 1 reply
{{ DiscussionBoard.errors[2774004].message }}
- SantiSantana 14 years ago
  
  Originally Posted by LD Carter
  
  Taxes are actually unconstitutional. But shhhhhhh!
  
  I seem to recall seeing a documentary on Edge TV about this very issue some time ago. I think it referred not to all taxes but to federal ones.
  
  In any case I do think they should simply update the laws on it as taxes are very much necessary to keep a country running. Overtaxing is bad, undertaxing is also bad. There needs to be a balance. Just my opinion though.
  
  [ 1 ] Thanks
  
  Signature
  
  Writer for hire
  
  {{ DiscussionBoard.errors[2774499].message }}
alpacabob 14 years ago

Wow that's a sticky issue, but from the article, I think Texas is, in fact, dead wrong. My understanding of the internet rules in the US is that the billing location is where sales tax is collected. So- if the sales were closed by this KY subsidiary, then someone in Kentucky who ordered something shipped from Texas by that subsidiary would have to pay sales tax. But since the money wasn't collected in Texas- it was collected in Kentucky- people in TX don't have to pay sales tax.

It really makes sense, too. You're not taxing the transportation of goods- you're taxing the transfer of money- hence why it's a "sales" tax, not a "durable goods" tax.

Of course- laws vary state-to-state, and who knows- maybe TX has some foreign tax provision that allows them to tax any economic activity that results in goods coming to their state. There are weirder laws out there.
- Thanks
- 1 reply
{{ DiscussionBoard.errors[2774197].message }}
- George Stavrakakis 14 years ago
  
  In NC, the state claimed that Amazon had a presence because the state considered the affiliates that presence.
  
  So Amazon drop affiliates from NC.
  
  Thanks
  
  1 reply
  
  Signature
  
  {{ DiscussionBoard.errors[2774247].message }}
  
  LeeLee 14 years ago
  
  Originally Posted by George Stavrakakis
  
  In NC, the state claimed that Amazon had a presence because the state considered the affiliates that presence.
  
  So Amazon drop affiliates from NC.
  
  This is what I was getting at. The little guy always comes out on the short end of the stick. And in the US there are a lot of guys who have completely run out of sticks.
  
  My first thought was if Texas was going to play hardball, why wouldn't Amazon move the distribution center a little bit to the south across the border.
  
  Thanks
  
  1 reply
  
  Signature
  
  The wisdom of life consists in the elimination of nonessentials. ~ Lin Yutang
  
  {{ DiscussionBoard.errors[2774355].message }}
  
  whateverpedia 14 years ago
  
  Originally Posted by LeeLee
  
  The little guy always comes out on the short end of the stick..
  
  That's the way its always been.
  
  Thanks
  
  Signature
  
  Why do garden gnomes smell so bad?
  So that blind people can hate them as well.
  
  {{ DiscussionBoard.errors[2774482].message }}
HeySal 14 years ago

They are becoming aware LD.

As far as the problem from what I read elsewhere - it seems like it was a newer piece of legislation that has allowed TX to take action -- but I'm not sure how they will justify "retroactive". You can't be guilty of a crime that was legal when you committed it.

If this isn't in response to NEW legislation - TX needs a pretty good excuse for not saying something before a 5 year span went by. Just that fact alone says something is just majorly twisted with this whole story.
- Thanks
Signature

Sal
When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path
{{ DiscussionBoard.errors[2774999].message }}
danicat 14 years ago

Texas isnt in the wrong. Mostly. Going after back taxes is questionable. However, people in texas buying things online are supposed to pay tax on them. Singling out amazon is wrong, but in an election year do you really expect them to go after the voters?

Keep in mind that we dont have a state income tax. Ill take a sales tax over state any day.

Now the question is, should we be mad at amazon for any backlash, or texas? Id say amazon. They could have done what was right and collected the taxes. Furthermore, people buying in texas could have just paid as they were supposed to. Most people didnt know they should have been paying, but ignorance is bliss or whatever.
- Thanks
{{ DiscussionBoard.errors[2775135].message }}
ingeniousaffiliate 14 years ago

SHHHH...

But the easiest thing to do (at least for the foreseeable future) for any affiliate dealing with amazon is to move your business address to Nevada. Ever since they dropped NC affiliates like a bad sitcom, I've been advising affiliates to register their businesses in Nevada.

Because as more and more states start seeing Amazon for the cash cow it is, you'll see more states trying to collect. Texas is just the latest and since fewer than 10% of Amazon's sales come from affiliates (their own statement), it's easier to drop any affiliates than pay additional taxes.

I suppose one day Nevada may cease being the business haven it is but for right now...
Guard your stuff!!!
- [ 1 ] Thanks
Signature
The S.C.A.M. PRODUCT CREATION METHOD
Completely White Hat - Check it out
------------------------------
Make your customers an offer they can't refuse! - FREE WSO
{{ DiscussionBoard.errors[2775266].message }}

The State of Texas vs. Amazon

Trending Topics

New around here!

Business Process Improvement Consultancy

Is their is any possibility of redirecting the users to shop page when they request exchange?

New high school teacher wanting to quit

My Autonomous Uber Experience