* One in a series of state-by-state spats
* Amazon has 20 percent of all US online retail sales
By Nanette Byrnes
April 27 Amazon.com agreed to begin
collecting sales tax in Texas on Friday, forging a deal that
promises to bring more jobs to the southern U.S. state and as
the online marketer lost another round in a series of
state-by-state sales tax battles.
The agreement, to take effect on July 1 for Texas'
6.25-percent sales tax, follows another accord reached with
Nevada earlier in the week to begin collecting that state's 8.1
percent sales tax on Jan. 1, 2014.
Amazon rings up an estimated 20 percent of all U.S. online
retail sales, making it the country's largest online retailer.
Most online purchases are free of sales tax, which has given
the company an edge over traditional, bricks-and-mortar
retailers that do collect sales tax.
As online sales have grown, and municipal budgets have
tightened, states have been pushing hard to capture more e-tail
sales tax revenue.
Under federal law, retailers with physical facilities in a
state can be forced by the state to collect sales tax on
purchases made by a resident of that state. That includes
e-tailers with distribution centers. E-tailers without physical
facilities in a state need not collect the tax.
BEST TAX TERMS
As Amazon has grown, it has needed more distribution
facilities, and in the past few years has parlayed the promise
of new facilities in exchange for the best tax terms possible
with states across the country.
The importance of that advantage was clear when Amazon
pulled up stakes in Texas last fall, shutting down its
distribution hub at the Dallas-Fort Worth airport after Texas
State Comptroller Susan Combs sent Amazon a $269 million bill
covering sales taxes it did not collect from 2005 to 2009.
In exchange for Amazon's promise to collect future taxes,
create at least 2,500 jobs and make at least $200 million in
capital investments in the Lone Star state, Combs is dropping
the demand for back taxes.
Texas will bring to six the number of states where Amazon
currently collects sales tax.
According to its website, it already collects sales tax in
five of the 50 states -- Kansas, Kentucky, New York, North
Dakota and Washington -- on purchases made by people who live in
those states. Those are the five states where it has physical
facilities or affiliated sellers and no agreement with state
governments exempting Amazon from collecting sales tax.
A comprehensive federal solution to the question of which
companies must collect sales tax on online purchases has yet to
reach a vote in Congress.
In announcing the deal with Texas, Amazon's Vice President
of Global Public Policy, Paul Misener reiterated the company's
support for a national solution.
On Thursday, Amazon reported net sales of $13.18 billion for
the first quarter of 2012, up 34 percent from the same quarter
last year, with net income of $130 million.