Amazon’s alleged “physical presence” in Texas may cause them to settle unpaid taxes
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.
Amazon calls New York’s new tax policy, “invalid, illegal and unconstitutional”
Amazon has filed a lawsuit against the implementation of a new tax policy that would require online stores to collect sales taxes from their affiliates who embed advertising links on their site to drive more sales for retailers. Amazon calls the new tax policy, which was enacted a couple of weeks ago, as “invalid, illegal and unconstitutional,” as it dictates that retailers who would earn at least $10,000 of annual from affiliates in New York must collect sales taxes from those sales to be paid to the New York government.
The new Tax Policy has been receiving mixed reactions even from those not directly involved with the issue. Traditional retailers for one, have welcomed the new tax policy and believe that it would benefit them as it will eliminate the competitive advantage that online retailers have over them. Some critics on the other hand argue that this new policy would be an added burden to online retailers and their affiliates. Tax experts meanwhile, were not surprised with the new tax policy but they were afraid that should the law get upheld, this might establish a precedent which may be followed by other states.
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