Tax & Accounting Blog

Nexus Battle In Texas Results In Amazon Uproot

Indirect Tax, Sales and Use Tax, Sales Tax Nexus February 16, 2011

The ongoing conflict between and the state of Texas has taken an interesting turn. Amazon has informed the state of Texas that they will be closing their distribution center in Irving, Texas, resulting in more than 100 layoffs. This conflict originally came about when Texas sought to collect upwards of $269 million in past due sales taxes and penalties from, citing that the e-commerce giant has sufficient nexus in Texas due to their distribution center serving as a physical presence within the state. Amazon has contested this claim under the premise that as an online interstate commerce vendor they are exempt from collecting sales and use taxes. This contest continues to headline the issue of interstate e-commerce tax collection as states continue to seek methods to increase tax revenues to balance their budgets.