Remember that deal Amazon made with the state to start charging sales tax here and to commit to creating 2,500 jobs in return for having back taxes forgiven? Apparently, there’s not much in the deal to make them regret it if they don’t hold up their end of the bargain.
Amazon.com Inc. didn’t risk much when it agreed in April to create 2,500 jobs and invest $200 million in new distribution centers in Texas if the state forgave $269 million in back sales taxes.
If the online giant should fail to follow through on that promise, it has agreed to pay $1 million to the state — and Comptroller Susan Combs could not reopen her claims for back taxes before July 1, according to documents released Wednesday to the American-Statesman under the Texas Public Records Act.
Under the agreement, Amazon.com and its affiliates began collecting sales taxes from their Texas customers July 1.
Austin tax lawyer Buck Wood contends Combs is not legally authorized to make such a settlement and said she has created a double standard: a “too big to pay” class of taxpayers who get preferential treatment.
On Wednesday, after reading the agreement, Wood — a former deputy comptroller and also general counsel under the late Comptroller Bob Bullock — said Texas is not adequately protected if Amazon fails to keep up its end of the deal.
“I have a $269 million tax liability. I pay $1 million. That’s nothing,” Wood said. “If (Combs) can do this, she can do anything.”
Wood said Amazon got its tax bill forgiven just by agreeing to do what it wants to do anyway — build distribution centers in Texas. He dismissed the economic development aspects of the agreement as “window dressing.”
R.J. DeSilva, a spokesman for the comptroller’s office, defended the agreement.
“The company is collecting the sales taxes quicker than any other state,” he said. “That’s a huge part of it.”
As for the $1 million fee, DeSilva said, “The penalty is what it is, but there is a commitment by the company to invest in the state.”
Wood raised the issue of legality in May, but until/unless someone files suit it’s an academic concern. I share Wood’s concerns, and I have to shake my head at the level of deference being shown Amazon, but at the same time I appreciate that we got this done, without the courts or the Lege or Rick Perry getting involved and mucking it up. The goal was to get Amazon to pay sales tax, which is good for the state and good for the traditional retailers and given Amazon’s same-day delivery innovation may be god for them as well. At some level, the rest is gravy.