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Amazon Closes Doors in Texas for Tax Reasons
The State of Texas is seeking almost $270 million in back taxes that it says Amazon owes in respect of sales it made in Texas. Under a United States Supreme Court decision released in 1992, if a retailer does not have a physical presence in a state, it is not required to collect sales taxes on goods sold within that state. This decision is largely unpopular with the states, who allegedly lose out on an estimated $8.6 billion dollars in tax revenue per year.
As a result of Texas’ collection attempts, Amazon has closed its Texas distribution centre, and has terminated 119 employees. The state is apparently losing $600 million per year in untaxed online sales, and the State Comptroller is seeking to recover these amounts to help address a significant budget deficit. Unfortunately, this incentivizes closure of non-critical operations, as is demonstrated by Amazon’s decision.
For additional information, visit:
http://tinyurl.com/4d559p7