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

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader. He has been blogging about indie authors since 2010 while learning new tech skills weekly. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.


  1. Common Sense22 July, 2011

    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.

    1. Moriah Jovan23 July, 2011

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


  2. Daniel22 July, 2011

    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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