

Texas sends Amazon a $269M uncollected sales tax bill - bbatsell
http://www.techflash.com/seattle/2010/10/texas-slaps-amazoncom-with-269m-bill.html

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smackfu
You wonder how Texas would even know what amount to bill. That works out to
$4.3 billion dollars in sales at a 6.25% tax rate.

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lrm242
Because the state audited Amazon. FTFA:

"Amazon.com was audited for sales tax covering the time period of December
2005 to December 2009. They were assessed a liability and billed in August
2010. The company has requested a re-determination which means this is an
ongoing audit and could be decided as part of the administrative hearings
process. The company would send documents and this process will continue."

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smackfu
Hey, that wasn't in the article when I read it!

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DevX101
These are the warning shots. As commerce increasingly goes to the web, hungry
states will be tapping more companies for a piece of the action.

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potatolicious
I can't help but be sympathetic to local businesses though - lack of sales tax
probably pushes a lot of their former customers towards online shopping; and
to be fair, it is an unfair playing field (after all, the brick and mortars
can't very well stop charging sales tax).

I for one order all of my expensive hardware from out of state...

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jedberg
And technically you are committing a crime. It is your responsibility to
report use tax to your state for things you buy from out of state.

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netcan
I'm not from the US so I don't really understand the details.

What this always sounds like to me is that ecommerce broke the American sales
tax system. Transferring responsibility to individuals is obviously a
nonexistent solution to loose ends that never got tied up because they
represented such a small portion of sales. I really don't understand how this
will get fixed again without nationalizing sales tax.

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Tangurena
Historically, mail-order purchases were exempted from sales tax - unless the
seller had a presence in the state. Before there was the internet, before
there was telephone, some retail companies got their start shipping catalogs
to rural people. The people would order items via mail, and the items would be
shipped via train or mail.

Two of the biggest mail order retailers were Sears and Montgomery Ward. To
make sure that customers reached for the Sears catalog first, they made theirs
slightly smaller (about 1 cm smaller in width and height) so that the folks in
the house would stack the smaller catalog (Sears) on top of the larger one
(MW). Those old catalogs had everything: clothes, furniture, tools and even
house kits.

The 1897 one even had opium: [http://www.amazon.com/1897-Sears-Roebuck-
Catalogue-Israel/dp...](http://www.amazon.com/1897-Sears-Roebuck-Catalogue-
Israel/dp/0791046265)

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marze
Isn't interstate commerce non-taxable, as per the constitution?

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jws
As long as there is more than one lawyer on the planet it won't be that
simple.

Amazon has fulfillment centers in Texas and a subsidiary as well. This may be
sufficient to trigger Texas' state sales tax laws.

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Figs
I wonder how long it will be before all the data centers move to places like
the Bahamas...

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Tangurena
New York is one of the states that treats co-lo as enough of a presence to
trigger the "you must now collect sales tax" requirement. I think TN is
another.

However, in this case Amazon had at least one warehouse and at least one
office in TX.

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Bricejm
This can be difficult to explain. Sales tax or 'Sales and Use tax 'SUT' is the
responsibility of the customer not the vendor. I'm an accountant and often a
small business will send us a bill that doesn't include sales tax. Some things
are exempt from sales tax, but some things are not. It's up to us to decide if
we need to 'assess' ourselves sales tax based on the service/product that we
received. We send a check to the government for the sales tax the vendor
didn't charge us. When we're audited this is one of the big issues that we
need to provide documentation. It seems to be a concept that's turned around,
but it's up to the customer to make sure the tax is paid, not the vendor.
Although it is different state to state. The only way I see Amazon liable for
sales tax is through the purchase of their inventory, not the actual sales to
customers like us, although it is normally assumed that large corporations
charge sales tax and there might be a tax law that says just that. I looked at
my last Amazon order and I wasn't charged sales tax, so I'm not sure how
Amazon gets around this.

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smackfu
"Sales tax or 'Sales and Use tax 'SUT' is the responsibility of the customer
not the vendor."

Wouldn't that imply that a vendor could just not charge sales tax and not be
fined for it? Which doesn't seem right.

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Bricejm
I'm not quite sure what makes the difference. I'm sure there are laws for
large corporations vs. a small business. All I know is when our corporation
isn't charged sales tax on a non-exempt item, it's our responsibility to pay
the sales tax, even though we were the customer.

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rdzah
Looks like amazon needs to hire google's accountant.

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wmf
Given that Amazon was founded in Seattle for tax reasons, I suspect Bezos is
just as smart as Google in this case.

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Semiapies
Yep. I suspect the state's claim won't stand when it's all hashed out, but
that'll probably be after the next election...

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lrm242
Amazon will undoubtedly settle. Texas is trying to close a budget short fall
for the next cycle that begins in 2011. Amazon has a distribution center in
Texas and Texas believes that means they have a nexus of operations. Amazon
disagrees. Texas wants/needs money and Amazon certainly doesn't want the court
to rule that they are subject to paying sales tax because their distribution
constitutes sufficient operations to conclude they do business in Texas.
Therefore, my prediction: settlement.

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dhyasama
If they settle isn't that admitting they have a nexus in Texas (love saying
that) and will have to collect sales tax going forward?

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jdc
They'd only admitting that settling costs less than winning or losing a
lawsuit.

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ck2
I bet chains like Walmart are somehow behind this if you look behind the
curtains.

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binarymax
When did the Texas "nexus" law come into effect? I thought it was just passed
this year, so surely this makes their attempt at collection ex post facto?

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AndyKelley
Amazon provides a fantastic service that millions of customers enjoy. Can we
just leave them alone to keep making our lives easier, please?

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dualogy
But the govt needs funds to make your lives harder, don't you see? It's that
old yin-yang thing.

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johngalt
Immediately suspend sales to anyone in the state of Texas.

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qq66
The "hardball" approach isn't always the best. If you play hardball and lose,
you permanently lower your power and influence.

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johngalt
I agree and the comment was mostly tongue-in-cheek. But it does make you
wonder about local legislative bodies, and their jurisdiction.

Let's say tomorrow some country decides that any website their citizenry has
access to is taxable. At what point does a company just say "not worth it".
That decision would have a more to do with the wealth and power of the country
than objective merit of the claims.

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smurfpellet
everything's bigger in Texas

