Amazon.com Shutting Texas Operations Over Internet Sales Tax Squabble

12 February 2011 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

After devoting my February column in eCommerceTimes to Internet sales tax issues there was an interesting turn of events over the dispute between Amazon.com and the Texas Comptroller over a $269 million Internet sales tax bill. Amazon.com announced it was shutting down its Texas operations on April 12, 2011. In January Amazon.com filed a lawsuit against the Texas Comptroller to get the Internet sales tax audit which was the basis of the Texas Comptroller’s a $269 million Internet sales tax, but the Texas Comptroller claims the Internet sales tax audit cannot be released because of attorney client privilege. Texas Governor Perry announced that the Texas Comptroller was wrong and running off Amazon.com was bad for business in Texas. When the US Congress created the ban on Internet sales taxes back in 1998 (Internet Tax Freedom Act) the main purpose was to encourage the growth to the Internet, and now that it’s clear that the eCommerce is here to stay. Although collecting Internet sales taxes sounds great to help states find new revenue sources, it’s actually you and I who will be paying the Internet sales taxes. So it seems to me allowing more Internet sales taxes will not help consumers at all.

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