Bitter sweet news i guess. We won't get charged sales tax on purchases but current and future jobs are lost. http://www.click2houston.com/news/26832375/detail.html Spoiler AUSTIN, Texas -- Online retail giant Amazon.com is closing a suburban Dallas distribution center and scrapping plans to expand Texas operations after a dispute with the state over millions of dollars in sales taxes, an executive informed employees Thursday in an e-mail obtained by The Associated Press. Dave Clark, Amazon's vice president of operations, writes in the e-mail that the center will close April 12 due to Texas' "unfavorable regulatory climate." Amazon spokeswoman Mary Osako would not say Thursday how many employees work at the Irving distribution center. Texas contends Amazon is responsible for sales taxes not collected on online sales in the state. The comptroller's office last year demanded $269 million in uncollected sales taxes from the company. The case is currently pending before the State Office of Administrative Hearings. "We regret losing any business in Texas, but our position hasn't changed: If you have a presence in the state of Texas you are required to pay sales tax, just like any other business that has a presence in Texas," said Allen Spelce, a spokesman for Texas Comptroller Susan Combs. Spelce said Texas loses an estimated $600 million in Internet sales taxes every year. Amazon has been the target of numerous lawsuits filed by states seeking sales taxes on online purchases made from within their borders. Clark also said in his e-mail that the company was "previously planning to build additional facilities and expand in Texas, bringing more than 1,000 new jobs and tens of millions of investment dollars to the state, and we regret the need to reverse course." Texas employees who are willing to relocate will be offered positions in other states, Clark said. "We've had ongoing communications over the years encouraging Amazon to expand their business in Texas, and we recently encouraged them to stay in the state," said Katherine Cesinger, spokeswoman for Gov. Rick Perry. "We are always mindful of the tax burden on families and businesses in our state, and it is important that Texas clarify the laws regarding this issue to further strengthen the reliability of our tax system and to protect Texas jobs." The Irving distribution center, known as a fulfillment center, opened in 2005. During Amazon's fourth-quarter earnings conference call last month, CFO Tom Szkutak said company had 52 fulfillment centers after adding 13 in 2010. The Alliance for Main Street Fairness, a lobbying group for small businesses working to eliminate Internet sales tax loopholes, criticized Amazon's decision to close the Irving center. "Texas retailers collect and remit sales taxes every day -- whether the sale happens in a store or online," said Danny Diaz, a spokesman for the group. "Amazon.com was asked to play by the same rules, and has responded by eliminating hundreds of Texas jobs. Amazon could have chosen to collect the sales tax as Texas retailers do, but instead they opted to protect their special sales tax loophole to the detriment of hardworking families."
The Teabag part of me will cheer any news of not being charged taxes for Amazon orders. Sucks those Dallas people lost their jerbs.
So basically. Amazon moves this center to just over the line in Oklahome/New Mexico or Louisiana. . . then they would be ok . .and not have to pay the taxes. Is that correct? Rocket River
I believe this center was in Mesquite? Sounds like the Attorney General of Texas got a lil' pissy that Amazon found a loophole in Texas' tax code.
I had no idea that amazon had a presence in tx. But isn't the responsibility of paying sales tax on the consumer?
Agreed - they are in this same dispute with other states too, from my understanding. It's great for consumers, but is really unfair for other businesses. How can a local business compete when Amazon can sell everything 8% cheaper? Sales taxes are a big chunk of state budgets, so at some point, there is going to have be some kind of universal agreement on a plan to deal with state sales taxes from internet companies.
i just got the adventures of pete and pete season 2 for $13 and cheap shipping. Sales taxes are a pretty crappy way to scrounge up money. Gov. Rick needs to quit spending so much money so he doesn't need to pillage the state businesses. That way when season three gets produced im not paying 3 extra dollars so state employees get a lower deductable on there dental plans.
Sucks, but Amazon not paying while every other business operating here has to is unfair (but I would love to shop at Directron tax-free though).
Great. So instead of not getting the collected sales taxes the state wants, we don't get the taxes or the business Amazon would have added when they expanded AND lose all the jobs and income from the current distribution center. Brilliant.
Don't know. Something other than 'lose everything'. All or nothing approach doesn't seem to have much benefit.
Woot is a subsidiary... it is taxed as a separate legal entity from Amazon. Edit: Well, maybe not. My inference from the article below is that Amazon set up the distribution center in Irving as a subsidiary as well, and that was the loophole the article macalu posted was referring to but did not explain. http://www.bizmology.com/2011/02/11/amazon-com-quits-texas-over-taxes/ Spoiler Amazon.com quits Texas over taxes by Alexandra Biesada, February 11th, 2011, Friday. Texas Gov. Rick Perry takes great pride in talking up Texas’ business friendly climate. To hear him tell it, Texas is a magnet for businesses from all over the country (see here). So it came as a bit of a shock to read that online retail giant amazon.com will close a fulfillment center near Dallas in April due to the ”unfavorable regulatory climate” in Texas. In addition to closing the Irving facility, Amazon is scrapping plans to expand in The Lone Star State — home to the world’s 15th-biggest economy — at the cost of more than 1,000 new jobs and tens of millions of dollars lost to the state. So what has Texas done to drive Amazon away? Demand that the company fork over $269 million in uncollected sales taxes. Amazon, which rang up more than $34 billion in sales in 2010, does not collect sales or other taxes on shipments of most of its products in most US states. As a result, Texas and the other five states from which Amazon distributes products (Arizona, Indiana, Nevada, Pennsylvania, and Virginia) are losing out on sales taxes on online purchases made within their states. And we need that money! Texans are staring down the barrel of a budget shortfall as high as $27 billion, with potentially devastating consequences for our public schools and universities, social programs and other services. While $269 million seems like a small drop in a $27-billion bucket, I know of a local school district that certainly could use the money! In the midst of a budget crisis driven in part by declining state sales tax receipts (see here), it’s hard to defend the Internet tax loophole, especially when it siphons sales from local retailers who are obligated to collect it. Amazon defends its exemption under a 1992 Supreme Court ruling that says a state cannot require Internet retailers to charge sales tax on its behalf unless they have a physical presence in that state. One might assume that the fact that Amazon has a distribution facility (opened in 2005) in Texas, constitutes a physical presence. But Amazon would disagree. It argues that, because the facility is a separate legal entity, it does not have a physical presence in Texas. Such a ruling may have made some sense when Internet sales were a fraction of the retail economy. But with the increasing popularity of e-commerce, combined with falling sales tax revenues in cash-strapped states, it’s time to close the loophole. Even the National Retail Federation, a trade group for the nation’s retailers, argues that Internet-only retailers enjoy an unfair price advantage over bricks-and-mortar stores, and is seeking Congressional redress (read here). Until the loophole is closed, it’s goodbye and good riddance to Amazon.com! ------------------------------------- If that is the case... I think I agree with Amazon's interpretation of the law and the article's opinion that it needs to be changed. Somebody explain to me why I'm wrong.
So how does Woot work then? I've never used it. Do people in Texas have to pay taxes on stuff they buy there? I ask, because I know Woot was based in Carrollton, Tx. (yet another suburb of Dallas, and not too far from Irving).
