Amazon.com has reached a settlement in one of its largest and longest-running state tax disputes, striking a deal with the Texas comptroller to resolve the state’s claims that the company owed some $269 million in back taxes in the state.

Under the deal, Amazon will start collecting taxes on online sales in the state on July 1. The company also committed to create at least 2,500 jobs and make at least $200 million in capital investment in the state over the next four years.

Amazon disclosed the settlement in its quarterly filing with the SEC this morning.

“While we continue to believe the assessment was without merit, in April 2012, we entered into a settlement with the State of Texas that included an agreement to collect sales taxes on applicable sales transactions for our US-focused internet retailers beginning July 1, 2012, resolution of Texas sales taxes up to that date, certain commitments related to capital investment and job creation in the state, and an immaterial payment to the state.”

Amazon previously promised to create as many as 6,000 jobs in Texas and invest $300 million over three years, according to the Austin-American Statesman, which reported on negotiations between the state and Amazon earlier this week. But in exchange for those commitments, the company had sought an exemption from collecting taxes on online sales in the state for more than four years.

Traditional retailers say Amazon has an unfair advantage when it’s not required to collect sales tax. The company has long contended that distribution centers such as the one it operated in Texas don’t constitute enough of a physical presence to require it to collect taxes on online sales. Amazon is calling for a uniform federal law to address the issue.

It’s the latest in a series of developments on the issue around the country. Earlier this week, Amazon agreed to collect taxes in Arizona starting in 2014. Meanwhile, in Illinois, a judge struck down a law that imposed a tax online retailers based on the presence of affiliates in the state. In California, Amazon agreed to start collecting sales tax next year.

Here’s the joint news release issued this morning by Amazon and the Texas comptroller …

Texas, Amazon Announce Agreement to Create Jobs
Online Retailer and Texas Leadership Call for Federal Action on Sales Tax

(AUSTIN, TX and SEATTLE, WA) — Texas Comptroller of Public Accounts Susan Combs and Amazon.com, Inc. today announced an agreement that will lead to the creation of thousands of new jobs in Texas by the online retailer.

According to the agreement between the Comptroller of Public Accounts and Amazon, the Company plans over the next four years to create at least 2,500 jobs and make at least $200 million in capital investments in the state and will begin to collect and remit Texas sales tax on July 1, 2012.  The agreement resolves all sales tax issues between Texas and Amazon.

“We thank Amazon for partnering with us to find a solution that works for our state,” said Combs.  “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.”

“Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs working with us to advance federal legislation,” said Amazon Vice President of Global Public Policy Paul Misener.  “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.”

Comments

  • Guest

    Thank you, Amazon, for continuing to create jobs and for investing in our communities.

    • Fuck

      Its blackmail, Texas is greedy as they come and run by rich assholes, aka Perry

  • Anonymous

    This is bad for Texas consumers and Amazon.  When you buy from Amazon you have to pay shipping, which was partially offset by not having to pay sales tax.  Now, Texas consumers will have to pay both shipping and sales tax.  Now consumers may buy from other online retailers.  Sad news.

  • http://twitter.com/fijiaaron Aaron Evans

    Looks like the end for Amazon & ecommerce.  Thanks to big government Texas.

  • Stoddman

    I’m writing
    today to say how disappointed I am that Amazon caved into Texas demands that Texas
    consumers that shop at Amazon pay state sales tax. All these years you have
    resisted various states demands to pay sales tax.  They even moved, in protest, their distribution
    center in Texas after they gave them over a million dollar bill for past sales taxes.  Amazon have flipped flopped their position after
    years of sticking to their guns on this issue. 
    Don’t you realize people shop on the internet because of low prices,
    free shipping and NO sales tax?  It’s a
    fair trade off because when you purchase on Amazon or any other store on the
    internet because you only can see a picture and read a description of the product you
    are buying.  You can’t feel, touch and
    handle the product like you can in a brick and mortar store.  Also it’s a lot easier to return an item to a
    local store than having to request an RMA to ship it back (sometimes at your
    own expense) to the internet store.  So
    not having to pay sales tax in my opinion is a fair trade off for not being
    able to physically examine the product and the ease it is to return it.  Another downside to their decision is that as you’re
    a large and successful internet company it could set a precedent for other
    online retailers to have to pay “the man” sales tax.  All the states are looking for ways to fill
    their empty coffers, mostly on the backs of the middle class and the poor.  As for me I’m sorry to say that I will take
    my business elsewhere and tell, blog and inform everyone I know of their
    reckless decision.  All they have done is
    help Best Buy, Barns & Noble, JC Pennys, Petsmart and various other local
    stores.  Why shop at Amazon where I have
    to wait days for an unseen product to arrive when I can walk into a local
    store, physically examine the product to make my decision to purchase it or not
    and easily return it if I don’t like it. 
    Amazon has made a bad decision and I hope they reverse it before it’s too
    late for them!  Look what happened to Netflix
    because of a BAD business decision.

    Thank You

    “Tax the rich;
    feed the poor until there are no rich no more”.

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