Amazon hit with US$269 million sales tax bill


This time last year, I raised the question of whether the playing field for booksellers here in Australia might be leveled a little by making online bookseller Amazon.com charge GST on the millions of dollars of books it sells in Australia. The principle being: why should an overseas bookseller be tax exempt and be given a competitive advantage over a local bookseller when they’re effectively doing the same thing?

Now it seems the US State of Texas has arrived at a similar conclusion. As reported in the US book industry news service Shelf Awareness, Texas has sent a bill for a massive US$269 million to Amazon.com for unpaid sales tax, a move greeted with cheers and flag-waving from the American Booksellers Association. It seems that Amazon’s been selling to Texans tax-free for years – on the basis, presumably, that Amazon isn’t based in Texas (the legal term apparently is having a ‘nexus’ there) and therefore is not obliged to levy sales tax on its sales there. The State of Texas thinks otherwise.

Of course, it’s harder to argue Amazon has a ‘nexus’ in Australia, but I think many booksellers here in Australia would heartily echo the words of words of the American Booksellers Association’s CEO Oren Teicher:

When a Texas-based customer buys a book from one of our Texas-based bookstore members either as an in-store or online purchase, our bookstore members follow existing Texas sales tax laws and collect and remit sales tax. We believe Amazon.com should do the same.

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