I’m a happy customer of Amazon.com and I don’t like having to pay sales taxes on purchases made anywhere. But the idea, put forth state rep. Linda Harper-Brown, that Texas sales tax law should be changed to benefit them is ridiculous.
Currently the law, combined with a U.S. Supreme Court decision, says that if a company has a point of presence in a state, that state can collect sales taxes for sales made within its borders. And yes, this does put Texas at a disadvantage of having order fulfillment centers placed here because we are such a large market. It does make more sense for catalog and web retailers to put their operations in very small states so that they have the price advantage of not charging sales tax to a larger number of customers.
Harper-Brown has filed a bill (HB 2719) which exempts a retailer from collecting Texas sales tax if the business operates or uses “only a fulfillment center… or a computer server” in Texas. The server part I could go for but not the brick-and-mortar warehouse filling and shipping orders. Rep. John Otto has filed an opposite bill (HB 2403) intended “to clarify the meaning of Texas law to prevent Internet retailers from evading tax liability…”
I was among the first to say that I thought Comptroller Combs badly handled the situation with Amazon and Amazon may have a case against the state. But that case is against how Combs’ office factored their tax bill and other procedural items, not the fact that Amazon has a point of presence in Texas and should be collecting sales taxes.
I’m not one who has a problem with out of state goods not being taxed but, we either have a sales tax within the sovereign borders of Texas or, we do not. To follow Harper-Brown’s direction undermines the common-sense application of Texas tax laws.
Robert Pratt is host of the top-rated Pratt on Texas radio program which can be heard at www.PrattonTexas.com
© 2011 Pratt on Texas