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Originally published Friday, April 27, 2012 at 2:35 PM

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Amazon.com agrees to begin collecting Texas sales taxes

Amazon said it will create at least 2,500 jobs in Texas and make at least $200 million in capital investment. In a federal regulatory filing, it said that it also made an "immaterial payment" to the state.

Fort Worth Star-Telegram

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FORT WORTH, Texas — Amazon.com and Texas Comptroller Susan Combs said Friday that the online retailer will begin to collect Texas sales taxes beginning July 1 under an agreement that Combs said "resolves all sales tax issues between Texas and Amazon."

Amazon said it will create at least 2,500 jobs in Texas and make at least $200 million in capital investment. In a federal regulatory filing, it said it also made an "immaterial payment" to the state.

"We thank Amazon for partnering with us to find a solution that works for our state," Combs, who has been trying to get Amazon to remit back sales taxes to the state, said in a news release.

"This is an important step in leveling the playing field in Texas," she said. "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."

"Amazon looks forward to creating thousands of new jobs in Texas and we appreciate Comptroller Combs' working with us to advance federal legislation," Paul Misener, Amazon.com's vice president of global public policy, said in a joint release with Combs. "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."

Texas and Amazon have been at odds over the collection of online sales taxes since last September, when Combs sent Amazon a $269 million bill covering sales taxes the comptroller said Amazon should have collected from 2005 to 2009. The bill included interest and penalties through the date of the assessment.

Combs has said Amazon is required to collect sales taxes on Texas transactions because it was operating a distribution center, constituting a physical presence, in Irving, Texas.

Amazon has disputed that claim. But in a quarterly filing Friday with the Securities and Exchange Commission, the company said it had paid Texas an unspecified amount as part of the settlement.

"While we continue to believe the assessment was without merit, in April 2012, we entered into a settlement with the state of Texas that included an agreement to collect sales taxes on applicable sales transactions for our U.S.-focused Internet retailers beginning July 1, 2012, resolution of Texas sales taxes up to that date, certain commitments related to capital investment and job creation in the state, and an immaterial payment to the state," Amazon said in the filing.

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