Amazon, Texas Reach Deal to Settle Sales Tax Spat

Online retail giant to collect sales tax in Texas

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    NEWSLETTERS

    Amazon.com has agreed to start collecting sales tax in Texas beginning July 1.

    Get ready to start paying more for purchases on Amazon.com.

    The giant online retailer has agreed to start collecting sales tax in Texas beginning July 1.

    “Why not Amazon? Why not other companies that are selling in the state of Texas?” said Lucina Rogers, who owns Gold n Carats Jeweler in Irving, where Amazon used to have a huge distribution center.

    Rogers, who must collect tax on every sale she makes, said it is only fair that Amazon do the same.

    Amazon said it would bring jobs back to the state and start paying sales tax barely a year after closing a distribution center in a dispute over the levies.

    Amazon and Texas Comptroller Susan Combs said Friday they had an agreement for the company to bring at least 2,500 jobs and $200 million in capital investments.

    “It upsets me. But what are we to do?”says Priscilla Arvizu, of Irving.

    Some online shoppers said they may go elsewhere.

    “That kind of takes away ... the luxury of shopping online,” said Becky Brune, of Irving. “I mean, I might as well go to a store anyway."

    And it may not end there. Amazon’s decision could lead other online retailers to follow along.

    “For people who like to buy things from Amazon and don’t like to pay their taxes, this is bad news," said Mike Davis, of Southern Methodist University’s Cox School of Business.

    “Amazon's the big giant in online marketing, but you’ve got a lot of other places that are selling goods online," he said. "Are they going to go over and start collecting taxes, too? They don’t have to."

    Amazon’s decision ends long-running dispute with the state, which sent the company a $269 million bill covering taxes it said Amazon should have collected from 2005 to 2009.

    The company said last year it was closing a Dallas-area distribution center and scrapping plans to expand Texas operations. A few months later, the Legislature approved legislation to close a loophole that allowed online retailers to avoid paying sales tax in Texas.

    Combs said the deal settles all tax disputes with Amazon.