The Austin Chronicle

Amazon's Waltz Across Taxes

By Richard Whittaker, February 18, 2011, News

Amazon has announced it will be close its Texas distribution center and lay off more than 1,000 employees in April over what it claims is an "unfavorable regulatory climate." What did they find so unbearable? Comptroller Susan Combs' ruling that the online store should pay sales taxes, just like every other retailer. Now odd battle lines have been drawn, with Gov. Rick Perry backing Amazon over his own comptroller and Austin Rep. Elliott Naishtat siding with Combs' attempt to collect $269 million in back sales taxes. Amazon has a track record of quitting states over taxes, having already walked out of Colorado and Rhode Island, and is currently embroiled in a fight with North Carolina after terminating its affiliate vendor program there. In an interview with the Washington Examiner, Perry said Combs should not have sent the tax bill because its Irving distribution center was a warehouse and not "a store front. ... It was specifically there to manage products that need to be shipped out." But on Feb. 14, Naishtat filed House Bill 1317, which would close the e-commerce loophole that allows firms like Amazon to undercut taxpaying local businesses. Naishtat said: "This bill is not about raising taxes. Rather, this bill is about fairness."

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