Amazon offers Texas 5,000 jobs in trade for sales-tax exemption
Amazon.com wants to make a deal with the state of Texas.
The Dallas Morning News
DALLAS — Amazon.com wants to make a deal with the state of Texas.
The proposed offer circulating around Austin and obtained by The Dallas Morning News would let Amazon off the hook for collecting sales taxes from its Texas customers over the next 4 ½ years and would bring 5,000 jobs to the state.
The company also is promising to spend $300 million to open distribution centers where those employees would work.
Finally, it wants the Texas comptroller's office to set up a website where its customers can send sales tax owed on Amazon purchases to the state. Historically, voluntary sales-tax payments haven't been reliable.
South Carolina recently accepted a similar offer from Amazon.
Amazon didn't respond to a request for comment.
The Seattle-based online superstore made the offer after the Texas Legislature reaffirmed a bill provision that would force Amazon and other online retailers with a physical presence in the state to collect sales taxes.
In the regular session of the Legislature, Gov. Rick Perry had vetoed an online sales-tax bill by Republican Rep. John Otto and Democratic Sen. Royce West. Then lawmakers inserted the same language into a pending school-finance bill in a section on revenue generators. The finance bill must be passed to fully fund schools, and the special session ends June 29.
The comptroller's office estimates that Amazon owes the state $269 million in uncollected sales taxes from 2004 to 2009, plus penalties.
Perry's deputy press secretary, Lucy Nashed, said Monday that the governor continues to support legislation that creates jobs in Texas.
Perry can't veto the school bill's section that pertains to online sales-tax collections. He would have to veto the entire finance bill and call a new special session without a guarantee that the Legislature would side with him.
Many think Congress should tackle online sales taxes at the federal level, and Perry has said he thinks it's a federal issue.
The Main Street Alliance, a coalition of big and small retailers, urged legislators "to stand their ground and support the language that has been studied and received overwhelming votes all session."
Alliance spokesman Eric Bearse noted that Amazon didn't make the offer during the regular session and called it a "last-ditch, desperate appeal to protect their tax-evasion status for another 4 ½ years."
Besides the governor's office, it's not clear to whom Amazon is pitching its moratorium offer. A spokeswoman in Otto's office said that no one from Amazon has contacted the bill's author, and several other state representatives and senators contacted Monday said they hadn't heard from Amazon.
Before the Legislature passed the bill clarifying who must collect sales taxes in Texas, Amazon had threatened to shut down its Irving, Texas, distribution center. Eventually it let go all 112 employees who worked there. Workers hired by a temporary employment firm are maintaining the facility.
In Texas, Amazon has one more threat to make. It could move its wholly owned subsidiary, Woot.com, out of state. According to sources in the Legislature, Amazon officials have brought up the online retailer in private negotiations.
Woot founder and CEO Matt Rutledge said he couldn't comment.
Founded in Carrollton, Texas, in 2004, Woot was one of the first deal-of-the-day websites. Unlike its parent, Woot has always collected sales taxes from its customers in Texas.