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Oct 25 – Oct 31, 2010 Edition Texas Assesses Amazon for Back-Due Taxes

AUSTIN, TX/AUTHORLINK NEWS/October 26, 2010–The Texas State comptroller’s Office has assessed Amazon $269 million in uncollected sales taxes for the December 2005-2009 period, including penalties and interest, but the state says it has not specifically targeted the huge retailer. For some time now Amazon has fought to avoid paying the state taxes because it does not have “nexus” ( a physical business presence) in Texas and said the State did not provide sufficient cause for assessing the tax.

The State of Texas issued a statement this week: “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.”

Allen Spelce, Director of Communications for the Texas Comptroller of Public Accounts, was asked if the State was specifically targeting Amazon or online retailers. He answered, “We were not, we do however, through our Business Activity Research Team in our Audit Division carry out ongoing work to evaluate and where appropriate, assess tax on any entity that has potential nexus with the state. This will from time to time include online retailers. Since this is an ongoing audit and could be decided in the administrative hearing process, we cannot legally discuss the specifics of a taxpayer audit.”

The American Booksellers Association has long advocated that that Amazon, and other online retailers, should collect sales tax in states where they have a presence in the state, calling it a matter of “e-fairness.” According to Publishers Weekly, on hearing the Texas decision, ABA CEO Oren Teicher praised the ruling. “We applaud the State of Texas for taking action against Amazon for its refusal to collect and remit sales tax despite its having clear nexus in the state. The state government should not be in the business of picking and choosing favorites. Our independent bookstores in the state follow the state sales tax laws – so should Amazon.com.”