Purchases Will No Longer Be Tax-Free for Texas

AMAZON.COM PURCHASES WILL NO LONGER BE TAX-FREE FOR TEXAS and the State of Texas were able to work out a deal to cover that little $269 million bill for uncollected sales taxes the comptroller’s office sent the online retailer last September. And the result may benefit brick-and-mortar stucco-and-Styrofoam retailers throughout the state. Beginning July 1, Amazon will begin charging sales tax on all online purchases shipped to Texas. The company has also promised to invest at least $200 million in Texas, create at least 2,500 new jobs here over the next 4 years, and cough up an undisclosed payment. Early last year, Amazon had threatened to shut down its distribution center outside of Dallas. [Star-Telegram] Photo of Irving distribution center: Kati Drisc/Texas Tribune

21 Comment

  • Worst news of the day.

  • I guess I will have to buy my new plasma TV from Amazon before then.

  • Old story, and not accurate. They are still working on this. Next time, read the 2012 news, dears.

  • More regressive taxation. Who runs this state?

  • Gah, I figured it would happen sooner or later. Looks like I’ll be doing my Christmas shopping early this year.

  • Ummm….the swamplot post is from today’s tribune. Your link is from April 24. I think it is time to get rid of the special tax status for online shopping. Once upon a time it was thought that tax free online shopping would help the internet catch on and grow. This was back in the day when had a magnificent flame out and people were reluctant to bypass a brick and mortar store for the interweb. Now, my elderly mother works the net for deals on just about everything she buys. The internet does not need any help anymore. People buying and selling on the web should not get a tax break just because they are using a different medium to execute a purchase than others.

  • @infinite_jim

    Isn’t the current situation regressive taxation? The ability to sidestep sales tax by buying online is essentially a tax break for people with computers, internet access and credit cards. While having those things doesn’t exactly make you a one-percenter, they are still unavailable to many in the lowest income brackets. I don’t personally look forward to having to pay tax on everything from Amazon, but neither can I think of a persuasive argument why I shouldn’t have to.

  • Like I said on HAIF, I’m surprised it lasted this long.

  • Good point TacoTruck, I didn’t think it logically through in terms of protecting online retailers from the sales tax. Moreso I think it shows the priorities of elected state leaders in determining where to raise funds in the shortfall in tax revenues (see my comment on HAIF).

  • the anatomy of a government shakedown!

  • i’m depressed, but at the same time it’s what i’ve been wanting for years now. just wish it was federal legislation finally evening the playing field for all rather than individual states being slowly brought into the fold by cash-strapped legislatures.

  • @infinite_jim
    I also now get what you meant, and you are correct that sales taxes as a whole are, indeed, regressive.

  • If a company isn’t located in a state, they couldn’t be forced to collect and remit sales tax. It’s easy to make an argument against amazon as they are big enough to setup a system of collections and payments. However when Texas said “you have a disti here, collect tax” they said “fine, we will pack up our disti and get it outta Texas”, so no more presence should mean no more tax collection. To which some states reply “whoa whoa. Let’s work something out…”
    So what next, when I sell something to someone out of state I have to collect whatever state/city sales tax there might be and send it to their city/state? After what company size should you HAVE to do this? Who pays the extra accounting labor and paperwork to deal with all that. Ultimately the consumer.
    Aren’t we Already killing people with enough taxes and rules? I spent a good 1/4 of my day (that I’ll never get back) at the permit office so maybe I’m just extra sensitive to big brothers reach right now…
    And buying something from out of state doesn’t mean you don’t pay sales tax. Just the other party doesn’t have to collect it for you. I know in California you’re supposed to claim and pay sales tax on out-of-state purchases. Do most people fail to do so? Sure. But that’s not the out-of-state realtors fault.

  • The same day the “progressive liberal” state of Illinois voted down similar legislation.

  • All you W-2 drones who do have the worries and responsibilities of running a small business will never understand. Ship to one side of the street it is one rate. Ship to the other side of the street it is another. Now multiply that thousands or tens of thousands of times knowing that the state has the right to look back at every transaction and never take into account a good faith effort to comply with the endlessly complicated rules. Just fine and threaten siezure and arrest We measure our tax filings by the inch. Everybody but the bureacrats lost in this decision.

  • Taxes and zoning = bad, needless intrusion into my life. Fire department and streets = necessary essentials.

  • Current Texas Sale Tax law requires that sales tax be paid on all purchases, regardless of whether they are made in a store or online. Under the law if you buy something from (or any online retailer that does not hold a Texas Sales Tax Certificate) and they do not charge you sales tax the buyer should send a copy of the receipt with a check for 8.25% of the sale to the State.

  • Saving the tax and a trip to the store is why I purchase 90% of my electronics from Amazon, if this happens, I hope Amazon reduces the yearly Prime membership to make up for it.

  • Anyone knows when and where Amazon will open distribution centers in Texas?

  • This is great news for local retail businesses.