Senate Passes Amazon-related Sales Tax Bill
By Barry Harrell of Statesman.com (comments included)
The Texas Senate has overwhelmingly passed a measure aimed at tightening the state’s rules on when online businesses must collect sales tax.
Senators voted 30-1 today to pass House Bill 2403, a measure that originated with Rep. John Otto, R-Dayton. The bill was sponsored in the Senate by Sen. Royce West, D-Dallas.
The bill now goes to Gov. Rick Perry.
With its vote, the Senate joined the House in siding with state Comptroller Susan Combs in her push to force Amazon.com and other online retailers to collect taxes on sales made to Texans.
The company has consistently opposed collecting tax on its online sales, which has angered state governments and traditional retailers. Combs has said Texas loses $600 million a year in uncollected tax revenue on online sales.
The issue has been a political hot button in the state since Combs’ office last year sent Amazon a notice that it owes $269 million in uncollected sales taxes, citing the company’s distribution center in Irving.
Under a 1992 U.S. Supreme Court decision, retailers with a physical presence in a state can be required to collect sales taxes, legal experts say.
The bill passed by the Senate and House aims to eliminate what Otto has called loopholes in state law about what constitutes a physical presence.
The bill amends the state tax code to clarify that a “seller or retailer” is required to collect sales tax if:
- The business “maintains, occupies, or uses in this state permanently, temporarily, directly, or indirectly or through a subsidiary or agent by whatever name, an office, distribution center, sales or sample room or place, warehouse, storage place, or any other physical location where business is conducted.”
- The seller is “entrusted with possession of tangible personal property” through an agreement with another business or entity and is authorized to sell, rent or lease the property. The bill also clarifies that a person or business is considered to be a retailer if they hold a “substantial ownership interest” in any entity that conducts those activities in Texas.
The bill does not address “click-through nexus,” the practice of using online retailers’ relationships with Texas-based affiliate marketers to establish physical presence.
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Atonious, you should know by now that there still are loopholes in the tax laws and collection process of corporations and companies doing business here.
The wealthy pay 40 percent fewer income taxes than they did 1 or 2 years ago. It all seems stacked for the wealthy.
BTW, I support my local service companies. They get all my business. Why would you opt to pay taxes when you can get the same item online tax-free and maybe even less cost for it without any shipping costs?
And… I “support legislation that gives free stuff” ???
What the heck are you talking about?
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We can trash hundreds of jobs at Amazon, but we’ve save a half dozen down here in the yacht basin. The lege can pass laws on 42, fishing tournaments, Formula One racing, voter ID, sonograms, etc, but can’t handle a budget. Republicans – losing jobs and creating deficits since 1980.
Bye-bye Amazon jobs. Their distribution center and others like it will be leaving the state. Nice work Tx legislature.
Damn Republicans lying again…
I thought you teebeggers weren’t gonna raise taxes ???
Lying hypocritical so and so’s…
Sometimes I order from Amazon, sometimes I use a different online retailer. I also sometimes go to the brick & mortar store of some online retailers. This won’t make me stop shopping at Amazon but I’ll be more careful as to what I do or don’t buy online.
Amazon does NOT beat us when you compare apples to apples. Unfortunately, bone heads like Reggie think their getting a good deal and inferior or obsolete products. Hey Reggie, you might want to do some homework before running your mouth next time. Sales tax has nothing to do with inventory levels and those 119 jobs in N. TX, I’m sure we can do without. The thing this state can’t do without is all the lost revenue from sales tax collection. Reggie, please stay at Amazon and please stay the hel out of my store.
I agree with Reggie #1. I have been voting with my pocketbook since Amazon became viable a few years ago. I have enjoyed every bit of my freedom to chose NOT to pay taxes. But I still go to local bookstores and buy some things because Half Price is cheaper and has a better selection. So, I am not a tax dodge. I just go where the prices are cheaper. If Reggie and I are tax dodges, then so is everyone in the state who takes advantage of the “tax free holiday” that we have been having for years. Regardless, this bill is a waste of time because there is no way that Perry is going to sign any legislation that makes Combs the winner of an argument.
Reggie – that is about the most un-educated statement you could have possibly made. go do some homework before you start running your mouth. what does local retail inventory have to do with collecting sales tax from amazon? NOTHING. Oh, and all those jobs in North TX, do you mean all 119 of them? OH BOY, what are we going to do now, may as well succeed to Mexico. Lets face it Reggie, you don’t want to support your local retailers because your a cheap *%^er. You know what, don’t bother going into their stores to try stuff on before purchasing over at amazon and don’t bother supporting the more than 119 jobs that local retailers provide. In fact, why don’t you go work for amazon and get out of texas while your at it.
I am so tired of local businesses whine about having to collect taxes Amazon does not have to collect. I could spend all day running around town trying to find a store that has what I want in stock. Want a CD or a book (95% of what I buy on Amazon), forget buying locally unless you want the latest bestseller or top 10 hit. Local brick and mortars simply don’t have any selection. And I’ve got news for you, Texas is still not going to get one dime in revenue from this because Amazon will just close up shop in Texas, all those people in the North Texas distribution center will lose their jobs, and then Amazon will still be able to sell to Texans and not collect sales tax. Our market is just too big for them to do anything else. One more point: its not a done deal that Perry will sign this since he’s gone on record opposing it in the last six months.
So now how about making EXXON, AT&T, Transocean, Haliburton and about 1000 other Corporations pay their fair share of tax dollars. And I thought you were not going to “raise taxes” but now if anyone shops Amazon they will in fact pay taxes that they did not have to pay. HYPOCRITES!
Pstern…the comptroller has agents and enforcement officers who enforce our state’s tax laws. So that is already being done. As far as favoritism that is what Amazon wants so why would you support that? Instead you should be supporting Texas businesses who collect our taxes and are at an 8.25% disadvantage over these huge international companies that don’t care a thing about us. Is saving 8.25% really that important to you? I realize you often post in support of legislation that gives you free stuff but we can’t all be like that. Someone has to pay the bills.
No matter what happens with this, Amazon will still beat any local prices on almost any given product, by a lot. I’ll still use Amazon for 99% of my shopping. Internet Shopping is SO much easier!
No matter what happens with this, Amazon will still beat any local prices on almost any given product, by a lot.
Legislators should worry more about companies based in Texas paying their fair share of business taxes instead of focusing on Internet companies.
All this will do is to force Texans who purchase online to seek out businesses based in other states.
Texas legislators are nototious for proposing ridiculous bills and options to remedy issues, e.g., increasing class sizes to compensate for firing teachers.
I blame Texans for letting the Senate and House get away with their wanton special interest favoritism.
Someone needs to tell the first commenter here – this only levels the playing field for local retailers. It’s only a tax increase for those who choose to shop at corporate online retailer like tax cheats like Amazon.
Someone…. do you run a business? Because I do. Just so you know, when I opened my business, I was well aware that I would have to charge you and everyone else in Texas 8 and a quarter on anything I sell you. Amazon knew this, they used the good old “Well I didn’t understand the law” excuse. I’m not a business attorney and I didn’t get an MBA. How the Heck do you figure Amazon didn’t understand the tax laws and I did? They were ALWAYS supposed to charge you tax. THEY are breaking laws by NOT charging you tax.
And next time you want the city to pay for something, think about what you just said. Governments have to operate on money. Taxes are their income.
… that raising taxes was not on the voters’ agenda when they cast out so many Democrats in the 2010 elections. When you charge Amazon for sales tax, Amazon starts collecting sales tax from me.
See story and comments @
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/politics/entries/2011/05/13/senate_passes_amazonrelated_sa.html?cxntfid=blogs_postcards
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