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