April 27, 2012, 2:28 PM

Amazon will collect tax in Texas

The e-retailer will begin collecting sales tax on purchases there starting July 1.

Lead Photo

In a sharp turnaround in its dealings with the state of Texas, Amazon.com Inc. has agreed to begin collecting sales tax July 1 on purchases made by Texas residents.

“We thank Amazon for partnering with us to find a solution that works for our state,” Susan Combs, the Texas Comptroller of Public Accounts, said in a press release posted today on her department’s web site.

As part of the agreement, Amazon, No. 1 in the Internet Retailer Top 500 Guide, will invest at least $200 million in Texas and create at least 2,500 jobs, the comptroller’s office said. It did not say how that money would be invested or what kind of jobs Amazon will create. Amazon did not immediately return a request for comment.

Amazon has also signed agreements to begin collecting sales tax in several other states, including Nevada, Virginia, Indiana and Tennessee, though these agreements don’t take effect until 2013 or 2014.

The comptroller’s office didn’t provide additional details about the terms of its agreement with Amazon. Last year, Amazon filed a lawsuit seeking to block the state from forcing Amazon to pay what the comptroller’s office said was $269 million in uncollected sales tax on sales to Texas residents from December 2005 to December 2009.

Amazon has also said it would close existing fulfillment operations in Texas and cancel plans for new facilities if it could not reach an agreement with the state on sales tax collection.

Combs and Paul Misener, Amazon’s vice president of global public policy, said in the statement released today, however, that both the state and the retailer would work to support proposed federal legislation that would require more online retailers to collect sales tax. Under existing federal law, states can only require sales tax collection by retailers who have a physical in-state presence like stores or distribution centers.

“This is an important step in leveling the playing field in Texas,” Combs said in the release. “However, Congress should enact federal legislation that will give states access to revenues that are already due, which would resolve this issue fairly for all retailers and all states.”

Added Misener: “Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs working with us to advance federal legislation. We strongly support the creation of a simplified and equitable federal framework, because Congressional action will protect states’ rights, level the playing field for all sellers, and give states like Texas the ability to obtain all the sales tax revenue that is already due.”

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