# I Guess Amazon Caved to Texas



## R. Doug (Aug 14, 2010)

After getting hit with a sales tax bill from Texas in excess of $269 million and claiming that they were going to fight it, Amazon just charged me sales tax on a Kindle eBook.

That was a short fight.


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## Terrence OBrien (Oct 21, 2010)

Amazon had a very weak position in this. They have a distribution center in Irving, Texas. Hence they have a physical presence in the state which triggers the sales tax. Amazon tried to get around it by assigning the ownership of the facility to an Amazon subsidiary, then claiming Amazon didn't own it because the subsidiary did.


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## R. Doug (Aug 14, 2010)

What if Texas won the battle but lost the war?  Wouldn't it be something to see Amazon pay the $269 million, lay off all those Texas employees, sell off the distribution center in question, and relocate it in another state.


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## MrMiracle (Oct 28, 2010)

Most states are hurting for cash, lately.  They haven't been charging sales tax on internet orders for one reason or another, but have started clamping down on web sales as a source of short-term revenue.


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## Jan Strnad (May 27, 2010)

My state of California requires you to report any out of state purchases, such as through Amazon, and to pay our 9.75% sales tax. So far this policy has brought in, over the years, more than $1.12. Really there's no way to collect sales tax on internet sales unless the retailer charges it.

Sounds as if Amazon was just trying to game the system and lost.


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## Steph H (Oct 28, 2008)

R. Doug said:


> After getting hit with a sales tax bill from Texas in excess of $269 million and claiming that they were going to fight it, Amazon just charged me sales tax on a Kindle eBook.
> 
> That was a short fight.


Awwww nuts. I'd guess that means they're going to charge sales tax on everything? That sucks. And I hadn't heard anything about it. You'd think they could at least email their Texas customers to warn them it was going to happen. I wonder if non-one-click orders will show a warning...


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## Betsy the Quilter (Oct 27, 2008)

I have an unpopular view on sales tax on online purchases...so I won't share it here.  


Betsy


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## Jan Strnad (May 27, 2010)

Betsy the Quilter said:


> I have an unpopular view on sales tax on online purchases...so I won't share it here.
> 
> 
> Betsy


Meaning, you're for it? 

Go ahead...express an unpopular opinion! I promise that no one will egg your house.


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## northtexas (May 16, 2010)

R. Doug said:


> After getting hit with a sales tax bill from Texas in excess of $269 million and claiming that they were going to fight it, Amazon just charged me sales tax on a Kindle eBook.
> 
> That was a short fight.


I live in Texas so I checked my orders for this month including the JavoEdge black croc cover I ordered today (on sale) and have not been charged sales tax for anything...yet.


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## Mike D. aka jmiked (Oct 28, 2008)

R. Doug said:


> Amazon just charged me sales tax on a Kindle eBook.


Amazon has been collecting sales tax for months on ebooks whose publishers have a physical presence in the purchaser's state. Probably a third to a half of the ebooks I have purchased from Amazon in the last 4-6 months have had the tax added (I live in Texas).

Mike


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## Geoffrey (Jun 20, 2009)

Well, if they have a distribution center here in the Metroplex and they're going to start charging me sales tax, I hope they at least start offering same day delivery ....


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## northtexas (May 16, 2010)

jmiked said:


> Amazon has been collecting sales tax for months on ebooks whose publishers have a physical presence in the purchaser's state. Probably a third to a half of the ebooks I have purchased from Amazon in the last 4-6 months have had the tax added (I live in Texas).
> 
> Mike


The following is a partial list of merchants selling items at Amazon.com which may be included in your order, and the states in which they charge sales tax.

Amazon.com LLC: KS, KY, ND, NY and WA 
Amazon Digital Services, Inc.: KY, ND, NY and WA (Kindle content, MP3s, and digital videos are only taxable in KY and WA) 
Electronic Arts, Inc.: All States except for AK, ID, ME, MS, ND, NM, SD, VT, WV, and WY* 
Magazine Express, Inc.: AL and WA 
New York Times, Inc.: AL, DC, KY, and NY* 
Synapse Services, Inc.: WA only 
Target.com: All states other than VT 
Hachette Digital, Inc.: AL, AZ, CO, CT, DC, HI, ID, IN, KY, LA, ME, MS, NC, NE, NJ, NM, SD, TN, TX, UT, VT, WA, WI and WY* 
Harper Collins Publishers, LLC: All States* 
Penguin Group (USA) Inc: All States* 
Simon & Schuster Digital Sales, Inc.: All states other than AK, DE, MT, NH, and OR* 
Macmillan: AZ, CO, CT, DC, HI, IN, KY, ME, MS, NC, NE, NJ, NM, SD, TN, TX, UT, VT, WA, WI and WY* 
Dow Jones & Company, Inc: AZ, CT, DC, HI, ID, KY, NC, SD, and TX* 
Zondervan Corporation LLC: CA, CO, FL, GA, IA, IL, IN, LA, MA, MD, MI, MO, NC, NV, OH, PA, SC, TX and WA*


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## NogDog (May 1, 2009)

Yep. If the book is sold via the "agency model", then it is the publisher -- not Amazon -- who determines if state sales tax is to be included.


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## Ann in Arlington (Oct 27, 2008)

Jan Strnad said:


> My state of California requires you to report any out of state purchases, such as through Amazon, and to pay our 9.75% sales tax. So far this policy has brought in, over the years, more than $1.12. Really there's no way to collect sales tax on internet sales unless the retailer charges it.
> 
> Sounds as if Amazon was just trying to game the system and lost.


Most states that have a sales tax have a law like that. . .it's down to the purchaser to report their out of state purchaser. The state really has no way to compel the seller to collect it on their behalf if the seller has no presence in the state. More and more of them, though, are sending 'query' letters to purchasers to ask if they've paid their 'use tax' as required.  It's one thing to 'accidentally' forget; it's another to blatantly lie when asked. And the rules are different per each state for physical items vs. digital items.

Anyway, Virginia also has such a law and, being one who prefers to follow the law, I'd be happier if Amazon collected it at purchase so I didn't have an extra form to fill out when I do my tax return.

But that's just me. . . .probably an unpopular stand. . . . .


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## Andra (Nov 19, 2008)

Since the Agency Model went into effect, I have seen sales tax on e-books from Hatchette, Harper Collins, Simon & Schuster, Macmillan and Penguin.


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## Geoffrey (Jun 20, 2009)

I looked it up a few months ago and Texas has a similar law to the one Ann just mentioned. I read the details on the state comptroller site (http://www.window.state.tx.us/taxinfo/sales/faq_use.html) and we do allegedly owe taxes on all internet purchases here in Texas.

But then they also seem to think that we owe them tax money if we purchase something out of state, bring it back to Texas and use it. They must never have met Texans before .... Guess they're going to need to hire a brazillion sales tax auditors to go door to door and try and sort out who bought what where. 'Cuz if they think I'm going to track that for them and send them checks, they got another think coming.


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## Cliff Ball (Apr 10, 2010)

Geoffrey said:


> Well, if they have a distribution center here in the Metroplex and they're going to start charging me sales tax, I hope they at least start offering same day delivery ....


Heck, those of us in the Metroplex could just drive to the Irving distribution center to pick up whatever we ordered. It won't happen, but, it'd be cool.


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## drenfrow (Jan 27, 2010)

I placed an order yesterday and wasn't charged tax.  I am going to be soooo bummed if Amazon starts charging tax in Texas.


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## MariaESchneider (Aug 1, 2009)

R. Doug said:


> After getting hit with a sales tax bill from Texas in excess of $269 million and claiming that they were going to fight it, Amazon just charged me sales tax on a Kindle eBook.
> 
> That was a short fight.


That may not be the reason. I get charged for Hachette books (I think it is them). Because Hachette is in Texas. I think the larger battle is still being fought, but I could be wrong.


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## CoffeeCat (Sep 13, 2010)

I know when I worked in a call center for a retail company, we got complaints about sales tax all the time because by law, we had to charge whatever the state sets for sales tax to the place we were shipping to (my state has no sales tax). It sucked, but it wasn't my company's rule, it was the state's. I'm not sure if the same applies to these Amazon purchases, but I'm a bit surprised that they'd charge sales tax for an electronic delivery.


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## vermontcathy (Feb 18, 2009)

Ann in Arlington said:


> Most states that have a sales tax have a law like that. . .it's down to the purchaser to report their out of state purchaser. The state really has no way to compel the seller to collect it on their behalf if the seller has no presence in the state.


In Vermont, our state income tax forms have a line to report purchases made out of state (including internet). They offer the option of the taxpayer actually calculating what they owe, OR paying a fixed amount based on income. For my household income, it is about $22. I happily pay that because the actual sales tax on what I buy online in a year would most likely be a lot more than that. And I wouldn't want to encourage an audit by claiming that I didn't buy a single thing online all year . Not everyone pays it, but I'm sure many do. It seems like a decent solution. They are basically letting me pay a fraction of the sales tax I really would have owed.


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## Geoffrey (Jun 20, 2009)

vermontcathy said:


> In Vermont, our state income tax forms have a line to report ...


To be fair, at least we don't have one of those (A state income tax, not a line). But, the good folks in Austin will need to come and ask me for money if they think I bought something out of state ....


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## RobertMarda (Oct 19, 2010)

Ann in Arlington said:


> Most states that have a sales tax have a law like that. . .it's down to the purchaser to report their out of state purchaser. The state really has no way to compel the seller to collect it on their behalf if the seller has no presence in the state. More and more of them, though, are sending 'query' letters to purchasers to ask if they've paid their 'use tax' as required.  It's one thing to 'accidentally' forget; it's another to blatantly lie when asked. And the rules are different per each state for physical items vs. digital items.
> 
> Anyway, Virginia also has such a law and, being one who prefers to follow the law, I'd be happier if Amazon collected it at purchase so I didn't have an extra form to fill out when I do my tax return.
> 
> But that's just me. . . .probably an unpopular stand. . . . .


I live in Virginia too and would prefer to just have all my purchases taxed at the time of purchase.

I don't keep track of everything I buy online and so at the end of the year it takes me time to figure out what I may have bought and not paid tax on so that I can pay the use tax. The less forms I have to fill out the better.


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## Guest (Nov 30, 2010)

R. Doug said:


> After getting hit with a sales tax bill from Texas in excess of $269 million and claiming that they were going to fight it, Amazon just charged me sales tax on a Kindle eBook.
> 
> That was a short fight.


The fight over the tax bill and charging you sales tax are two different things. I don't believe Amazon has ever fought the fact that a state can require them to charge sales tax for sales make to state residents. If you live in Texas, then Amazon has to charge you sales tax. Now if Texas only recently passed legislation charging sales tax on internet sales and tried to hit Amazon retroactively, then obviously Amazon would fight that as well.

What Amazon has been fighting over is the collection of sales tax for _sales made by affiliates._ This is where the federal government really needs to step in. If a business is located in a state, they may be required to collect sales tax for all sales made in the state. What that means is this:

I have an Amazon affiliate account. I live in NJ, which charges 7% sales tax. ************* claims the sale was made in NJ, even though the customer lives in Wyoming, because they bought the book from my affiliate site. Therefore they want to collect 7% sales tax. Meanwhile Wyoming wants to collect THEIR sales tax because the customer lives in Wyoming. You end up with two tax bills on the same purchase.

THIS is the situation that Amazon has been fighting. States are trying to change the definition of a business entity to include affiliates, which would basically just cause chaos and anarchy. Besides sales tax, it could also put Amazon on the hook for corporate taxes and filing fees for doing business in a state, even if they have no physical presence there. Imagine if Amazon had to file a state income tax report for every state they had an affiliate in?


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## terrireid (Aug 19, 2010)

Bards and Sages (Julie) said:


> The fight over the tax bill and charging you sales tax are two different things. I don't believe Amazon has ever fought the fact that a state can require them to charge sales tax for sales make to state residents. If you live in Texas, then Amazon has to charge you sales tax. Now if Texas only recently passed legislation charging sales tax on internet sales and tried to hit Amazon retroactively, then obviously Amazon would fight that as well.
> 
> What Amazon has been fighting over is the collection of sales tax for _sales made by affiliates._ This is where the federal government really needs to step in. If a business is located in a state, they may be required to collect sales tax for all sales made in the state. What that means is this:
> 
> ...


Thanks for the clarification.


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## Betsy the Quilter (Oct 27, 2008)

Jan Strnad said:


> Meaning, you're for it?
> 
> Go ahead...express an unpopular opinion! I promise that no one will egg your house.


Egging my house might be an improvement. 

At any rate, I think they should be taxed and would not object in the least if my Amazon purchases began to be taxed. I don't think the small extra cost would make me buy locally instead, because I love the convenience of shopping in my pajamas and having my items delivered to my front door. I do think the lack of tax gives some online merchants an advantage over local merchants, for high-end items.

Betsy


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## Jaasy (Feb 28, 2009)

I'ma use an Ostrich egg, isn't that the HUGE one!  LMAO...


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## Betsy the Quilter (Oct 27, 2008)

LOL, just keep it off the cars, that's all I ask...


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## terrireid (Aug 19, 2010)

Betsy the Quilter said:


> Egging my house might be an improvement.
> 
> At any rate, I think they should be taxed and would not object in the least if my Amazon purchases began to be taxed. I don't think the small extra cost would make me buy locally instead, because I love the convenience of shopping in my pajamas and having my items delivered to my front door. I do think the lack of tax gives some online merchants an advantage over local merchants, for high-end items.
> 
> Betsy


I agree. I'm in a community where lack of sales tax is causing major issues with city services, like police and fire. I'm another person who wouldn't think twice about paying sales tax on my online purchases. Sales tax would not change my purchasing habits.


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## Terrence OBrien (Oct 21, 2010)

" I'm in a community where lack of sales tax is causing major issues with city services, like police and fire. "

Ever hear them threaten to reduce the number of people who work in the city personnel office, road crews, parks departments, data processing, public relations, purchasing, or school administration? It always seems to be police and fire.


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## Basilius (Feb 20, 2010)

So...

Why don't you all just move to Oregon? We don't have no stinkin' sales tax!


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## terrireid (Aug 19, 2010)

Terrence OBrien said:


> " I'm in a community where lack of sales tax is causing major issues with city services, like police and fire. "
> 
> Ever hear them threaten to reduce the number of people who work in the city personnel office, road crews, parks departments, data processing, public relations, purchasing, or school administration? It always seems to be police and fire.


Yes - I agree - they always go for the more dramatic cuts - you never hear "Well, if we can't raise taxes, we're getting rid of three city clerks." But, I know that due to unemployment in our town as well as many manufacturing jobs going to Mexico or China - the city and county really are hurting.


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## Geoffrey (Jun 20, 2009)

Betsy the Quilter said:


> Egging my house might be an improvement.
> 
> At any rate, I think they should be taxed and would not object in the least if my Amazon purchases began to be taxed. I don't think the small extra cost would make me buy locally instead, because I love the convenience of shopping in my pajamas and having my items delivered to my front door. I do think the lack of tax gives some online merchants an advantage over local merchants, for high-end items.
> 
> Betsy


I've struck the Tough Texan pose - 'come and get mah taxes, I dare yah' ..... and I do feel that way. If they want me to pay these taxes, then collect them up front or come and get them. I don't mind paying them and I certainly don't think that all taxes are bad always - I'm just not going to go out of my way to track my purchases and make Austin take my money.

And paying sales tax on internet purchases won't make me stop buying online. It will, however, make me look at delivery times vs. overall cost savings vs. product availability vs. instant gratification a little closer.


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## KindleChickie (Oct 24, 2009)

This just isnt true. Amazon has never charged us Texans sales tax on things they sell, like all my Kindles in the last 2 plus years. Amazon is fighting Texas over taxes on the things they sell, not on affiliates.

If the OP would kindly post the book they purchases, I believe what we will see is that the book is one of those who are now being sold thru Amazon by the publisher. The last book I paid taxes on was Cleopatra: A Life which states it is sold by Hatchett Book Group. Decision Points was purchased the same day and had no taxes because it was sold by Amazon.



Bards and Sages (Julie) said:


> The fight over the tax bill and charging you sales tax are two different things. I don't believe Amazon has ever fought the fact that a state can require them to charge sales tax for sales make to state residents. If you live in Texas, then Amazon has to charge you sales tax. Now if Texas only recently passed legislation charging sales tax on internet sales and tried to hit Amazon retroactively, then obviously Amazon would fight that as well.
> 
> What Amazon has been fighting over is the collection of sales tax for _sales made by affiliates._ This is where the federal government really needs to step in. If a business is located in a state, they may be required to collect sales tax for all sales made in the state. What that means is this:
> 
> ...


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## Guest (Dec 1, 2010)

KindleChickie said:


> This just isnt true. Amazon has never charged us Texans sales tax on things they sell, like all my Kindles in the last 2 plus years. Amazon is fighting Texas over taxes on the things they sell, not on affiliates.


http://online.wsj.com/article/SB10001424052702304354104575568512331020710.html



> An Amazon spokeswoman said it has an existing fulfillment center in Texas that is an affiliate, but not subsidiary, of the Amazon retailing entity.
> 
> Amazon's disclosure was reported earlier by Seattle technology blog TechFlash


As per the news article. Amazon is fighting with Texas over whether or not a fullfillment warehouse is an affiliate or subsidiary. This is completely about the status of affiliates versus subsidiaries.


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## farmwife (Oct 10, 2010)

Interesting.  I live in North Dakota, so I have always had to pay sales tax on my Amazon purchases.  However, yesterday I placed an order to be sent to Houston, and was not charged sales tax.


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## Terrence OBrien (Oct 21, 2010)

The Kansas City metro area is about equally divided between Kansas and Missouri. Amazon has a large distribution center in Kansas, but no physical presence in Missouri. Since many people who live in Kansas work in Missouri, they simply have all their Amazon purchases sent to their work address in Missouri and pay no tax.


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## R. Doug (Aug 14, 2010)

KindleChickie said:


> If the OP would kindly post the book they purchases, I believe what we will see is that the book is one of those who are now being sold thru Amazon by the publisher.


Here you go:

Order Summary:
Details:
Order #: D01-9483256-2743369
Subtotal of items: $5.99
------
Total before tax: $5.99
Tax Collected: $0.49
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Total for this Order: $6.48

The following item is auto-delivered to your Kindle or other device. You can view more information about this order by clicking on the title on the Manage Your Kindle page at Amazon.com.
Murder, She Wrote: Murder on the QE2 [Kindle Edition] $5.99
Sold By: Penguin Publishing


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## Atunah (Nov 20, 2008)

Penguin has a physical presence in Texas so thats why there is tax on it. 

I am in Texas too, so far I have not been charged tax on anything, no ebooks either, because I pretty much stay away from the agency pricing. Tax is one reason, higher prices on average by the big 5 is the other. 

When you see the price saying set by "publisher xzy", you pretty much get charged tax in Texas. I think someone posted the list of publishers that have to charge it. The joys of agency pricing.


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## Jan Strnad (May 27, 2010)

Yes - I agree - they always go for the more dramatic cuts - you never hear "Well, if we can't raise taxes, we're getting rid of three city clerks."  

Those people are off the citizens' radar. They just get cut without a second thought. When things get so bad that they have to cut police or fire, people take notice.


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## terrireid (Aug 19, 2010)

Jan Strnad said:


> Yes - I agree - they always go for the more dramatic cuts - you never hear "Well, if we can't raise taxes, we're getting rid of three city clerks."
> 
> Those people are off the citizens' radar. They just get cut without a second thought. When things get so bad that they have to cut police or fire, people take notice.


And that's so sad - because these people have to feed their families and pay their bills too. And, although I realize that police and fire personnel have much riskier jobs, what the city clerks do is still important to the day to day running of the government.


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## northtexas (May 16, 2010)

Basilius said:


> So...
> 
> Why don't you all just move to Oregon? We don't have no stinkin' sales tax!


Because we don't have no stinkin' state income tax!


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## Betsy the Quilter (Oct 27, 2008)

Folks--

I'm going to move this over to Not Quite Kindle as it has always been more about taxes than books; probably should have moved it when I first started reading.  

Betsy
Book Corner Moderator


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## KindleChickie (Oct 24, 2009)

R. Doug said:


> Murder, She Wrote: Murder on the QE2 [Kindle Edition] $5.99
> _*Sold By: Penguin Publishing *_


Your book was charged taxes because it was sold by Penguin Publishing, not Amazon.


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## KindleChickie (Oct 24, 2009)

Bards and Sages (Julie) said:


> http://online.wsj.com/article/SB10001424052702304354104575568512331020710.html
> 
> As per the news article. Amazon is fighting with Texas over whether or not a fullfillment warehouse is an affiliate or subsidiary. This is completely about the status of affiliates versus subsidiaries.


First line of the article you quoted, "Amazon.com Inc. said it received an assessment of $269 million for uncollected sales tax from the state of Texas." Amazon has not been charging sales taxes to people in Texas. Texas wants them to charge taxes on everything they sell because of the distribution center. The fight is about whether Amazon should have been charging sales tax when they have not.


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## Guest (Dec 2, 2010)

KindleChickie said:


> First line of the article you quoted, "Amazon.com Inc. said it received an assessment of $269 million for uncollected sales tax from the state of Texas." Amazon has not been charging sales taxes to people in Texas. Texas wants them to charge taxes on everything they sell because of the distribution center. The fight is about whether Amazon should have been charging sales tax when they have not.


Again, specifically Amazon is saying it is not their subsidiary, but an affiliate. Amazon says the distribution center is a third party operation that fulfils orders for them, not their own employees. Amazon doesn't own the distribution center in Texas. It is owned by a third party contracted out. Amazon is using the same argument in this case that it used in New York regarding affiliates. They aren't Amazon employees and aren't owned by Amazon.


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## Linjeakel (Mar 17, 2010)

It's much simpler here in the UK. You buy a DTB, online or otherwise - no VAT. You buy an e-book - you pay VAT. Not exactly fair, but simple.


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