January 20, 2011, 1:43 PM

Amazon messes with Texas over a $269 million tax bill

Amazon is suing Texas, which last year billed the retailer for uncollected sales taxes.

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Amazon.com Inc. has filed suit in Texas to gain tax-related records, the latest development in the ongoing national battle over taxes for online purchases.

Amazon wants a court to order the Texas comptroller’s office to turn over audit data that resulted in the state sending a $269 million sales tax bill in October to the retailer, No. 1 in the Internet Retailer Top 500 Guide.  The state says the tax bill reflects sales to Texas residents from December 2005 to December 2009. The Amazon suit, filed Jan. 14 in Travis County District Court in the state capital of Austin, says the information is public under Texas law.

Neither Amazon nor Texas officers offered immediate comment.  Last month, according to the Austin American-Statesman, the Texas attorney general’s office said the information from the comptroller’s office was protected by attorney-client privilege. The comptroller’s office has estimated that Texas stands to gain $600 million annually from online sales taxes.

States across the country, eager to find more revenue, have stepped up efforts to collect sales or use taxes from online retailers or shoppers. It’s generally agreed that a retailer that has a store, distribution center or office in a state has a physical presence in that state and must collect sales tax from state residents in accordance with a U.S. Supreme Court ruling.  That ruling exempted online retailers with no physical presence in the state from collecting sales taxes. In recent years, some states have argued that e-retailers that receive traffic from web sites, or affiliates, in a state can also be required to collect sales taxes, an interpretation that online retailers are fighting in court.

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