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Comment by fsckin | Hacker News Reader

Amazon failed to collect/remit ~270M in sales tax in Texas and has owed millions for years. So what did the state of Texas do about it?

They struck a deal to erase the 270M owed, as long as Amazon starts collecting sales tax starting 7/1, create 2000 jobs and invest 200M in Texas. They were likely already planning more infrastructure in Texas, but threatened to reverse course and pull out of the state entirely.

The way I see it, Amazon bluffed the state of Texas to the tune of 270 million dollars and all I might get out of it is next day delivery?

I'll take what I can get, I guess.

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Companies are only required to pay state sales tax if they have a physical presence in that state. Amazon wasn't bluffing, Texas was. We went through the same thing in California. Amazon agreed to pay the sales tax, but only after it had decided to open distribution centers in the state.

Amazon has had a continuous presence in Texas from 2005 onward.

Distribution center operated in Irving, TX from 2005 through 2011. Woot, in Carrollton, TX was acquired in 2010.

Well, if that's the case they have to pay, legally.

I think the distribution center was owned indirectly, through some sort of holding company; that was the linchpin of their whole argument.

Woot was probably just one of the things they were threatening to close down and move out of state if Texas didn't give them a break. And I'm sure they had an argument ready as to why Woot wasn't a tax nexus for Amazon as a whole; there's a lot of really arcane rules that go into determining nexus.

The real losers at the end of all this are going to be the tax-free states, who ended up getting a lot of Amazon (and other mail-order retail) business because putting a warehouse there wouldn't risk triggering taxation. But if the tax loopholes are closed, there's not a lot of reason to set up shop there. They are going to be the losers in the end, I think.

Texas would have collected double taxes in the form of use tax from its resident and the sales tax from Amazon.

No one actually pays use taxes.

and customers' tax evasion is not Amazon's responsibility, under current law in most states.

Am I the only person in existence that does? My state offers a table that estimates your use tax due based on income. I've always used that.

I do as well. And I actually look through my bank records to make a reasonable estimate of how much I've bought online to get the number as good as I can without having to actually track everything all year.

My businesses do. Since we have to keep all the records for the Feds. Here in Washington it is nice to have Amazon collecting the sales tax. It leaves less use tax paper work for us.

The residents are required to pay a use tax on things purchased out of state. I don't see this as Amazon's responsibility.

I recently got an email from Amazon stating the amount I owed sales tax on in my home state of Tennessee, with a link to a tn.gov site where I could pay. Amazon actually seems to ship a lot of things to Memphis, so I'm not sure why they don't collect it directly.

Memphis is probably the FedEx central hub.

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