Report: Amazon Out of Texas Over Taxes

11 Feb, 2011 By: Chris Tribbey

Online retail giant Amazon.com will close its Irving, Texas, distribution center and is backing off plans to expand in the state over a dispute involving the state’s sales tax laws, the Associated Press reported.

The AP reported that an e-mail from Dave Clark, Amazon’s VP of operations, informed employees at the center that it would close April 12, after the state demanded $269 million in uncollected sales tax from the company.

“Despite much hard work and the support of other Texas officials, we’ve been unable to come to a resolution with the Texas comptroller’s office,” the letter read. The dispute also led Amazon to scrap plans "to build additional facilities and expand in Texas, bringing more than 1,000 new jobs and tens of millions of investment dollars to the state.”

Amazon did not immediately return requests for comment.

The state estimates it loses roughly $600 million in Internet sales tax per year, the AP reported.

"We regret losing any business in Texas, but our position hasn't changed: If you have a presence in the state of Texas you are required to pay sales tax, just like any other business that has a presence in Texas," Allen Spelce, a spokesman for Texas comptroller Susan Combs, told the news service.

Amazon has had a series of disputes with several states and their attempts to collect online sales tax, with the retailer severing ties with its Associates Program affiliates in Hawaii, North Carolina, Rhode Island and others.

Amazon’s Associates Program allows websites to place Amazon advertisements on their Web pages, and then earn money from Amazon purchases made as a result.