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Texas may claim Amazon owes sales taxes

By Associated Press May 9, 2008 Comments (0)

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Texas officials may claim that Amazon.com owes millions in sales taxes on purchases that state residents made from the Internet retailer.

A 1992 U.S. Supreme Court ruling lets states collect sales taxes from out-of-state retailers that have a "physical presence" in their state. Seattle-based Amazon runs a distribution center in Irving.

The Dallas Morning News reported in Friday's editions that it asked the Texas comptroller's office why the retailer didn't charge sales taxes on Texas customers. Robin Corrigan, a sales tax policy executive in the comptroller's office, said the agency didn't know Amazon operates a facility in the state.

Company officials "told me they don't have a distribution center in Texas," Corrigan said. "We will definitely send out a team to investigate."

Amazon media officials did not immediately return calls from The Associated Press for comment Friday.

Texas officials didn't say how much they think Amazon may owe, but Comptroller Susan Combs said in December that the state lost $541 million in sales taxes on Internet and mail-order sales during 2006.

The question of Texas taxes arose after Amazon sued the state of New York last month, saying it shouldn't have to pay sales taxes because it doesn't have a presence there.

The conflicts with Amazon are part of a larger debate over taxing Internet sales.

Some retailers, such as Plano-based J.C. Penney Co., have complained that competitors who don't collect sales taxes have an unfair advantage.

Legislation now pending in Congress would standardize the taxation of Internet sales while exempting small online retailers.

On its Web site, Amazon says purchases shipped to Kansas, Kentucky, North Dakota or Washington are subject to sales tax. It has operations in all four states. According to its Web site, it doesn't charge sales taxes in several other states where it also has operations, however.

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