Off the Kuff Rotating Header Image

Amazon abandons Texas

More job losses, and we haven’t even started firing teachers yet.

Online retail giant Amazon.com will close its suburban Dallas distribution center amid a dispute with the state over millions in uncollected state sales taxes, The Associated Press reported Thursday.

The AP obtained an e-mail Thursday sent to Amazon employees by Dave Clark, the company’s vice president of operations.

Clark wrote that the center in Irving will close April 12 because of the state’s “unfavorable regulatory climate.”

Amazon spokeswoman Mary Osako would not say how many employees work at the Irving distribution center.

Texas employees who are willing to relocate will be offered positions in other states, Clark said.

[…]

Allen Spelce, spokesman for the Texas comptroller’s office, said Thursday that though “we regret losing any business in the state of Texas,” that doesn’t change the state’s position.

“We feel like if you have a business presence in the state of Texas, you’re no different than any other business in the state of Texas, and you still owe sales tax,” Spelce said.

He declined to comment further on the state’s demand that Amazon pay back sales tax, saying the case remains in the hearings process.

I’ve said before that I side with the state in trying to collect these taxes from Amazon, and I’m not going to change my tune as a result of this. We really need action on this at the federal level, but we won’t get any from this Congress, that’s for sure.

In his e-mail to staffers, Clark said Amazon also is scrapping plans “to build additional facilities and expand in Texas, bringing more than 1,000 new jobs and tens of millions of investment dollars to the state.”

Katherine Cesinger, spokeswoman for Gov. Rick Perry, said the governor’s office has had “ongoing communications” encouraging Amazon to expand its business in Texas, “and we recently encouraged them to stay in the state.”

That’s in addition to the 119 jobs that will be lost immediately. With all the time Perry is spending gallivanting around the country rubbing elbows with the conservative elite, when did he ever have the chance to fit them into his schedule? And what would he have done about it anyway? Said “There, there, I’ll call of my Comptroller and we’ll find a way to give you a tax break, too”? Now that I think about it, the more gallivanting he does, the better. PDiddie, McBlogger, Grits, and Kevin Drum have more.

UPDATE: When I made up that quote about Perry telling Amazon he’d “call off” his Comptroller, I was only kidding. I should have known better.

Gov. Rick Perry, in Washington to speak to the conservative C-PAC gathering, today second-guessed Comptroller Susan Combs’ handling of a tax dispute with Amazon.

Amazon said this week it will close an Irving distribution center because of an unfavorable regulatory climate in Texas. The company cited Combs’ attempt to collect Texas sales tax on Amazon’s Internet sales to Texans, because the warehouse constituted a “nexus” under tax law.

In an interview with the Washington Examiner, Perry said the distribution center “obviously didn’t have a storefront.”

Perry said he would work with the Republican-controlled Legislature to try to make sure Amazon can stay. And he was bluntly criticial of his fellow Republican Combs:

“That is a problem and I would suggest to you that we need to look at that decision that our comptroller made,” he told the Examiner. “The comptroller made that decision independently. I would tell you from my perspective that’s not the decision I would have made.”

I will now type “I will never assume any position is too ridiculous for Rick Perry to adopt” one hundred times as my penance. Combs’ office released a statement saying they were just following the law. As if that sort of thing matters to Rick Perry.

Related Posts:

3 Comments

  1. texaschick says:

    This has more info regarding this.

    http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/entries/2011/02/11/119_to_lose_jobs_when_amazon_c.html
    excerpts
    “The notice from Amazon arrived at the workforce commission about 9:30 a.m. today, and said that the Irving facility — which opened in 2005 and is known as a fulfillment center — will close on April 13. The letter also gave a breakdown of the positions being eliminated. That breakdown lists 98 positions defined as either associates or assistants, 15 listed as managers, five listed as technicians or engineers and one medical representative.”

    “The state is seeking money from Amazon because of its distribution center in Irving. Under a 1992 U.S. Supreme Court decision, that physical presence means Amazon potentially could be required to collect sales tax on transactions in Texas, according to legal experts.

    Comptroller Susan Combs has estimated that the state loses $600 million a year from untaxed online sales. The comptroller’s office said last year that it has sent demands for payment to other online retailers similar to what it sent Amazon.

    Amazon, which reported $34 billion in sales last year, has also been the target of numerous lawsuits filed by other states seeking sales taxes on online purchases.”

  2. Ross says:

    Darn. I like Amazon, but they really need to collect the taxes in Texas if they have a presence here. i am in favor of a federal 5% tax on interstate sales that is remitted to the state of the receiver of the goods. That would level the playing field a bit, and allow states to collect taxes they deserve to collect.

  3. […] Trib has a good story that explains the background of the Perry-Combs smackdown over Amazon. There’s another player in this fight, and they’re on the […]