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It looks like Amazon’s decision to file a lawsuit against New York’s new tax policy on online stores may back fire on them as the Texas Comptroller’s Office is investigating the probability that the online store may actually owe the Texas government millions of dollars in unpaid taxes. If you will recall, in its case against the New York tax policy, Amazon argued that it should not pay the NY government any taxes because it doesn’t have a “physical presence” in New York.

The same reason is now being used by the Texas government as it found out that Amazon has a “physical presence” in the area. Apparently, Amazon has operated a distribution center at 2700 Regent Boulevard in Irving from 2006 to 2007. This was pointed out by the Dallas Morning News when it called Amazon to ask why it is not charging sales taxes to its online customers.

Amazon has not yet issued a statement confirming that it actually owns the distribution center. But if the presence of an Amazon flag outside the building is any indication of ownership, then Amazon may indeed own the distribution center.

Texas State Comptroller’s team leader for sales tax policy, Robin Corrigan, said that Amazon officials whom she spoke with never mentioned anything about the distribution center when speaking about their compliance to the state tax policy. She also stated that Amazon officials told her that they did not own any distribution center in Texas.

“If it’s determined that they are subject to sales taxes, then they can be held liable for taxes, penalties and interest,” Ms. Corrigan said.

So, Amazon may be facing a tax penalty that could cover up to four years worth of back taxes, including interests and other penalties. It is not yet clear as to how much Amazon may be owing the Texas government, but the Texas State Comptroller is already conducting a thorough investigation to finally shed light on this matter.

This will certainly be a big blow on Amazon but on the other side of the coin, it will also affect Amazon customers living in Texas. Soon, they might find themselves no longer enjoying the tax free transactions they are currently enjoying with Amazon.

Read [Dallas News]

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