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Texas and Amazon Reach Sales Tax Agreement


This morning the office of Texas Comptroller, Susan Combs, announced that Texas and Amazon have reached an agreement concerning sales tax collection and job creation. 

After a recent round of negotiations, Amazon has agreed to the following:

  • In the next four years, the company will create at least 2,500 jobs and invest at least $200 million in capital investments in Texas.
  • Amazon will begin to collect and remit Texas sales tax effective July 1, 2012.

The Lone Star State has struggled to strike a deal with the online retailer. Last year they  handed Amazon bill for $269 million in back taxes, and subsequently proposed legislation that would have exempted Amazon from collecting sales tax for 4 1/2 years in exchange for significant investment in the Texas economy (the legislation never passed).

Now the two parties have reached a new understanding. Both Combs and Amazon Vice President of Global Public Policy, Paul Misener, expressed their appreciation for the accord, and their desire for federal legislation regulating sales tax collection for online retailers:

“We thank Amazon for partnering with us to find a solution that works for our state. This is an important step in leveling the playing field in Texas; however, Congress should enact federal legislation that will give states access to revenues that are already due, which would resolve this issue fairly for all retailers and all states.” -Susan Combs

“Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs working with us to advance federal legislation. We strongly support the creation of a simplified and equitable federal framework, because Congressional action will protect states’ rights, level the playing field for all sellers, and give states like Texas the ability to obtain all the sales tax revenue that is already due.” -Paul Misener

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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.