Texas going after Amazon – Again

Only this time the state of Texas has the law on its side. Governor Rick Perry of Texas signed a new state budget into law on Tuesday. Among the many components of the new bill was a part that redefined the term nexus. You see, Amazon have been avoiding the duty of collecting taxes in most states because they don't operate in those states, and thus don't have a nexus there. The new law in Texas redefines nexus so it includes such things as Amazon's distribution centers. I know it might sound odd that a warehouse facility didn't qualify as operating in the state, but before the law changed technically Amazon did not operate in Texas (here's why).

And Amazon are responding the way they usually do: they're closing the distribution center they have in Texas.

Folks, I'm a realist.  I think Amazon should collect sales tax, but I also know that they will close a facility before giving in on this issue. That point was stupidly obvious to anyone with half a brain, but then again we're talking about politicians here. The Texas state legislature would rather screw over the thousands of people who used to work at Amazon's distribution center rather than admit that there's no practical way to force Amazon to collect sales tax.

What's even worse is that Amazon actually tried to work out a deal. They offered to build more distribution centers in Texas in exchange for an exemption. No dice.


image by j3net

About Nate Hoffelder (11474 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

3 Comments on Texas going after Amazon – Again

  1. Incredibly short-sighted on the part of the politicians, no surprise.

    Don’t forget that this isn’t only about Amazon. There are thousands of companies that operate online that this will apply to, including companies in Texas that will lose sales. That means less sales tax collected in state as well.

    Frankly, I feel that forcing retailers to be unpaid tax collectors should be unconstitutional. Government entities should do their own dirty work.

  2. Its always fun to see politicians acting surprised when they discovered that their reality and the real one don’t match. In current situation until there are at least 4 state in key locations that don’t have taxes amazon will just close facilities and move business to them. And the additional jobs there will be enough to keep them from not passing their own legislation for almost forever.

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