TEXAS COMPTROLLER AND AMAZON REACH DEAL ON SALES TAXES

On April 27, State Comptroller Susan Combs and Internet retailer Amazon.com reached an agreement regarding the future collection of sales taxes on online sales by Amazon.  According to Combs’ office, Amazon will begin collecting sales taxes on online sales made in Texas beginning on July 1, 2012, and also agreed to make capital investments of $200 million and to create 2,500 new jobs in the state over the next four years.  In exchange, the state will drop its efforts to collect $269 million in sales taxes that the state claimed should have been remitted based on a warehouse operation in the City of Irving from 2005 to 2009. 

The agreement comes after the legislature passed legislation in 2011 that clarified that Amazon had established a “nexus” in the state for purposes of collecting sales taxes.  The comptroller’s office has indicated to TML that the agreement will provide for the collection of local sales taxes due on online purchases from Amazon.  However, the question of how local sales taxes will be sourced for Amazon purchases is unclear because most of the details of the agreement remain confidential. 

TML staff has submitted a Public Information Act request to the comptroller’s office to obtain those portions of the agreement that dictate how local sales taxes are to be sourced, but no responsive information has yet been provided due to the confidentiality claims. 

League staff will continue to monitor this issue and will provide an update on sourcing of local sales taxes under the agreement when that information becomes available.   

 

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