updated 02:25 pm EST, Fri February 11, 2011
Amazon closes Texas center due to tax controversy
Because of a long-standing tax dispute with the state of Texas, online retailer Amazon will quit all business there, the Dallas News reported on Thursday. It should lead to Amazon shutting its Irving-based distribution facility on April 12 and cancel plans to hire 1,000 more workers. Texas said Amazon owes it $269 million in past-due sales tax.
The bill was sent to Amazon in October. Amazon says closing the distribution center is not its "preferred outcome." The new jobs would have come from additional facilities built in Texas. Amazon says the Irving center is owned by a subsidiary company.
A spokesman for the Texas comptroller's office responded by saying that if a company has a physical business presence is in the state of Texas, then it owes sales taxes. Amazon is appealing the bill through the administrative process, though it will be a while before this is completed.
The Texas comptroller estimated the state loses about $600 million every year in uncollected sales tax from Internet-based sales.
Two years ago, an Amazon lawsuit was dismissed on Internet-based tax collection New York.