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Texas, Amazon Come to Terms Over Taxes

30 Apr, 2012 By: Chris Tribbey

Amazon has reached a deal with the state of Texas to begin collecting sales tax on purchases made there beginning July 1.

The deal will see Amazon create at least 2,500 jobs in Texas throughout the next four years, along with $200 million in capital investments in the state by the Internet retailer.

Federal law prohibits states from forcing Internet retailers to charge sales tax as long as the retailer doesn’t have a physical presence in that state. According to Amazon, Texas will be the sixth state that it will collect sales tax in.

“Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller [Susan] Combs working with us to advance federal legislation,” said Paul Misener, Amazon VP of global public policy. “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.”

Amazon had fought Texas over its attempt to charge sales tax on Internet purchases, going so far as to shutter a distribution center there in 2011.

“We thank Amazon for partnering with us to find a solution that works for our state,” said Combs, Texas comptroller of public accounts. “This is an important step in leveling the playing field in Texas; 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.”

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