Texas may claim Amazon owes sales taxes

DALLAS, TX A 1992 U.S. Supreme Court ruling lets states collect sales taxes from out-of-state retailers that have a "physical presence" in their state. Seattle-based Amazon runs a distribution center in Irving.

The Dallas Morning News reported in Friday's editions that it asked the Texas comptroller's office why the retailer didn't charge sales taxes on Texas customers. Robin Corrigan, a sales tax policy executive in the comptroller's office, said the agency didn't know that Amazon was operating a facility in the state and that company officials "told me they don't have a distribution center in Texas."

"We will definitely send out a team to investigate," Corrigan said.

An Amazon spokeswoman, Patty Smith, told The Associated Press that state law doesn't require the company to collect sales taxes.

"We've been in the state of Texas since 2000, and we've interacted with a number of state and local tax officials," she said. "We remain in compliance with all Texas laws governing sales tax collection."

Smith said an Amazon subsidiary pays other Texas taxes, such as state and local property taxes on inventory, the state franchise tax and local business licenses.

The company began keeping inventories in the state in 2000 and opened the Irving center a few years ago, Smith said.

Texas officials didn't say how much they think Amazon may owe, but Comptroller Susan Combs said in December that the state lost $541 million in sales taxes on Internet and mail-order sales during 2006.

The question of Texas taxes arose after Amazon sued the state of New York last month, saying it shouldn't have to pay sales taxes because it doesn't have a presence there.

It's part of a larger debate over taxing Internet sales.

Some retailers, such as Plano-based J.C. Penney Co., have complained that competitors who don't collect sales taxes have an unfair advantage. Legislation in Congress would standardize the taxation of Internet sales while exempting small online retailers.

On its Web site, Amazon says purchases shipped to Kansas, Kentucky, North Dakota or Washington are subject to sales tax. It has operations in all four states. But according to its Web site, it doesn't charge sales taxes in several other states where it also has operations.

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