Texas Sales Tax Nexus - Texas Scorecard

Texas Comptroller Susan Combs is challenging Amazon.com for not paying sales taxes while they operated a facility in Irving between 2005 and 2009. Some liberals are saying her action is no different than Bill White’s push for a new Internet Sales Tax. They clearly don’t know much about taxes.

During a recent interview, Bill White indicated he supports changes in federal law that would allow the state of Texas to collect new sales taxes that the state is not currently entitled to. The action by Ms. Combs is in no way comparable to Mr. White’s proposal. Comptroller Combs is fighting for $269 million of taxes actually owed to the state, whereas Mr. White is trying to band together with other states to get the federal government to help find a pot of new revenues.

Based on standards articulated in Quill v. North Dakota, a 1992 U.S. Supreme Court decision, the state of Texas should receive sales tax revenues when a retailer has a physical presence, or nexus, in the state (i.e., an Amazon.com distribution center in Irving) and/or sells products intrastate via the Internet. However, it appears as though Amazon.com may have avoided paying their required sales taxes to the state.

Seeking clear enforcement in current tax collections is far different than imposing a new tax on retailers with no specific tie to the state.