The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
For a sales tax exemption, Amazon offers to create 6,000 jobs instead of 5,000.
In its ongoing battle with Texas over sales tax collection, Amazon.com Inc. has offered to create 20% more fulfillment and customer service jobs than it had initially promised, increasing the total to 6,000 from 5,000 positions.
In a letter to the Texas Legislature, Paul Misener, Amazon’s vice president for global public policy, requests a temporary exception to language in the current state budget bill that says a retailer must collect sales tax from Texas customers if the retailer operates a subsidiary in Texas such as a fulfillment or distribution center. In return, Misener writes, Amazon would “bring to Texas at least 6,000 new full-time jobs with comprehensive health care and other benefits, as well as at least $300 million in capital investment.”
The letter, a copy of which was obtained by Internet Retailer, goes on to say that Texas could expect to see the creation of at least another 6,000 indirect jobs stemming from the economic boost provided by Amazon’s investment. To support that projection, Misener notes that in South Carolina, where the government has granted Amazon a five-year exemption from sales tax collection, officials estimate that the 2,000 fulfillment and customer service jobs created by Amazon will lead to at least that many new indirect jobs created in related businesses. “By the same calculus, Texas stands to gain well over 10,000 jobs,” Misener writes.
Amazon wants the Texas Legislature to accept its proposal as part of the fiscal matters bill, SB 1, which covers a wide range of areas in the state budget.
An earlier bill that only sought to clarify that retailers with in-state subsidiaries were responsible for collecting sales tax, was vetoed recently by Gov. Rick Perry, a Republican. The governor has not commented on SB 1 or Amazon’s offer.
Rep. John Otto, the Republican member of the Texas House who authored the earlier bill on subsidiaries as well as the related language in the current spending bill, has also not yet commented on Amazon’s proposal.
Amazon has contended the subsidiary that operates its fulfillment operations in Texas is not covered by Texas law that says a retailer must collect sales tax if it operates physical facilities in the state. Federal law says states can mandate sales tax collection only by retailers that have an in-state physical presence, or “nexus” in legal terms.
Amazon is also opposing an effort by the Texas comptroller’s office to get the retailer to pay what the comptroller says is $269 million in uncollected sales tax for a four-year period from December 2005 to December 2009. The matter remains before a Texas court.