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Arizona Hands Amazon $53 Million Sales Tax Bill

  • Feb 3, 2012 | Will Frei

Arizona recently made Amazon’s *%$! list when it issued an assessment stating that Amazon owed the state and certain cities approximately $53 million in uncollected sales tax for the periods March 1, 2006 through December 31, 2010. Amazon reported on the assessment in its February 1, 10-K filing with the Securities and Exchange Commission. 

The company takes issue with Arizona’s assessment: “We believe that [it] is without merit and intend to vigorously defend ourselves in this matter.”

This is not the Internet retailer’s first trip to the rodeo. In 2010, Texas Comptroller Susan Combs claimed that Amazon owed $269 million in back taxes. Texas also passed a law that asserts nexus over companies that have warehouses or distribution centers in the state, and as a result, Amazon said it would close its distribution center in Irving, Texas.

Last week, Arizona Senator Al Melvin introduced a similar bill (Senate Bill 1338) that would tax internet sales of any company with a distribution center or warehouse in Arizona. Amazon currently has four distribution centers in the Phoenix area.

According to azcentral.com, Amazon said “the disputes with Arizona and Texas could materially affect its business, operating results, financial position and cash flows, depending on how they are resolved.” Anthony Forschino, a spokesman for the Arizona Department of Revenue declined to comment.

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Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.