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Texas sends Amazon a $269M uncollected sales tax bill

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Re: Texas sends Amazon a $269M uncollected sales tax bill

#21

Post by dhyasama »

lrm242 wrote: post #12
Semiapies wrote: post #11

Earlier quoted context omitted.

Yep. I suspect the state's claim won't stand when it's all hashed out, but that'll probably be after the next election...

Amazon will undoubtedly settle. Texas is trying to close a budget short fall for the next cycle that begins in 2011. Amazon has a distribution center in Texas and Texas believes that means they have a nexus of operations. Amazon disagrees. Texas wants/needs money and Amazon certainly doesn't want the court to rule that they are subject to paying sales tax because their distribution constitutes sufficient operations t…

If they settle isn't that admitting they have a nexus in Texas (love saying that) and will have to collect sales tax going forward?

Re: Texas sends Amazon a $269M uncollected sales tax bill

#22

Post by Bricejm »

This can be difficult to explain. Sales tax or 'Sales and Use tax 'SUT' is the responsibility of the customer not the vendor. I'm an accountant and often a small business will send us a bill that doesn't include sales tax. Some things are exempt from sales tax, but some things are not. It's up to us to decide if we need to 'assess' ourselves sales tax based on the service/product that we received. We send a check to the government for the sales tax the vendor didn't charge us. When we're audited this is one of the big issues that we need to provide documentation. It seems to be a concept that's turned around, but it's up to the customer to make sure the tax is paid, not the vendor. Although it is different state to state. The only way I see Amazon liable for sales tax is through the purchase of their inventory, not the actual sales to customers like us, although it is normally assumed that large corporations charge sales tax and there might be a tax law that says just that. I looked at my last Amazon order and I wasn't charged sales tax, so I'm not sure how Amazon gets around this.

Re: Texas sends Amazon a $269M uncollected sales tax bill

#23

Post by schwit »

DevX101 wrote: post #9

These are the warning shots. As commerce increasingly goes to the web, hungry states will be tapping more companies for a piece of the action.

Most would prefer to buy locally if prices are competitive. They don't mind paying reasonable taxes. But when the price of things on Amazon are significantly less ...

Re: Texas sends Amazon a $269M uncollected sales tax bill

#24

Post by jdc »

dhyasama wrote: post #21
lrm242 wrote: post #12

Earlier quoted context omitted.

Amazon will undoubtedly settle. Texas is trying to close a budget short fall for the next cycle that begins in 2011. Amazon has a distribution center in Texas and Texas believes that means they have a nexus of operations. Amazon disagrees. Texas wants/needs money and Amazon certainly doesn't want the court to rule that they are subject to paying sales tax because their distribution constitutes sufficient operations t…

If they settle isn't that admitting they have a nexus in Texas (love saying that) and will have to collect sales tax going forward?

They'd only admitting that settling costs less than winning or losing a lawsuit.

Re: Texas sends Amazon a $269M uncollected sales tax bill

#25

Post by jedberg »

potatolicious wrote: post #15
DevX101 wrote: post #9

These are the warning shots. As commerce increasingly goes to the web, hungry states will be tapping more companies for a piece of the action.

I can't help but be sympathetic to local businesses though - lack of sales tax probably pushes a lot of their former customers towards online shopping; and to be fair, it is an unfair playing field (after all, the brick and mortars can't very well stop charging sales tax). I for one order all of my expensive hardware from out of state...

And technically you are committing a crime. It is your responsibility to report use tax to your state for things you buy from out of state.

Re: Texas sends Amazon a $269M uncollected sales tax bill

#26

Post by sp332 »

kiba wrote: post #19
potatolicious wrote: post #15

Earlier quoted context omitted.

I can't help but be sympathetic to local businesses though - lack of sales tax probably pushes a lot of their former customers towards online shopping; and to be fair, it is an unfair playing field (after all, the brick and mortars can't very well stop charging sales tax). I for one order all of my expensive hardware from out of state...

Well, there's the shipping rate that people have to pay.

Not with Amazon Prime :-)

Re: Texas sends Amazon a $269M uncollected sales tax bill

#29

Post by slantyyz »

Bricejm wrote: post #22

This can be difficult to explain. Sales tax or 'Sales and Use tax 'SUT' is the responsibility of the customer not the vendor. I'm an accountant and often a small business will send us a bill that doesn't include sales tax. Some things are exempt from sales tax, but some things are not. It's up to us to decide if we need to 'assess' ourselves sales tax based on the service/product that we received. We send a check to…

I'm neither an accountant nor an American, but I thought that e-commerce was a grey area with respect to sales taxes in the US. Most e-commerce companies didn't charge sales tax outside of the state they operated in.

During the dotcom days I was assigned to research the implications of interstate transactions, and honestly, all that nexus stuff was dizzying.

I only recall hearing periodically (every couple of years) that the ecommerce sales tax moratorium (if you can call it that) had been extended yet again. Is that still the case?

Re: Texas sends Amazon a $269M uncollected sales tax bill

#30

Post by jhgfdsahgf »

Kaizyn wrote: post #27
marze wrote: post #14

Isn't interstate commerce non-taxable, as per the constitution?

The states get around this by insisting that companies doing business in their state must collect sales tax on state residents.

Easy way around it - all deliveries to Texas are shipped from an Amazon warehouse in New mexico and, deliveries in NM are shipped from Arizona etc.

All the orders are taken by Amazon Bermuda.

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