By now most of you have seen or read about the state of Texas’ $269 million assessment against Amazon.com. The assessment is for uncollected sales tax, penalties, and interest. In researching this situation, I found very little perspective on the basis for the assessment. I eventually stumbled across a two year old article in the Dallas Morning News which asserts that Amazon has had a distribution center in Irving, TX since 2006. Normally this would be a clear indication of sales tax nexus; however, the distribution center is apparently owned by a subsidiary which begins to blur the line as to whether the parent, Amazon.com, has nexus in the state.
Regardless of the outcome of this particular situation, it’s another indicator of all states’ posture to increase tax revenues. We’ve seen benevolent programs such as amnesty on the rise with the purpose of increasing tax revenue. We’ve seen tax rate increases, the taxing of new products and services, states compelling out of state retailers to provide lists of their clients and purchases, and in this situation the enforcement of nexus rules.
You should expect to see continued aggressive action in these areas from all states as long as there are budgetary concerns.
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