Amazon.com Plans for Fourth Facility Touted by Governor Brewer, State Revenue Department Says Company Cheats Tax Laws

Categories: News

no sales tax sign.JPG

Governor Jan Brewer today celebrates the arrival of Amazon.com's fourth major facility in Arizona today, yet the state's revenue department calls the company a tax cheat.

Brewer and the online bookseller's representatives are touting the estimated 3,000 jobs created by the company's other three Phoenix locations, including a 1.2 million square-foot facility. completed last year, plus new plans for a similarly sized building.

In a news release sent out by the governor's office this morning, Arizona Commerce Authority CEO Don Cardon was quoted as saying:

Amazon's expansion and investment in Arizona demonstrates that we offer a highly-skilled workforce and a business-friendly approach, which is increasingly appealing to companies representing the most innovative and passionate sectors in the world.

"Business-friendly," in this case, is code for "tax-free environment."

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​The announcement comes as pressure mounts for Amazon and other online retailers to start paying their fair share of state and local sales tax.

The company, which logged $32.5 billion in sales last year, is fighting California's new law that would force it to collect sales tax by pulling the plug on 10,000 businesses and people in that state.

Other states are considering laws intended to make Amazon and others pay up.

While Brewer's popping champagne corks, state tax collectors are grumbling. In May, state tax analyst Hsin Pai told the Business Journal that:

...Amazon has not been collecting sales taxes on orders filled at any of its three Arizona locations, and thus has not been in compliance with state tax laws.

The Journal article also noted:

That means the online retail giant, which has been shipping products from the Valley since opening its first fulfillment center here in 2007, could owe the state hundreds of millions of dollars in back taxes it failed to collect from consumers.

Amazon officials, like any shrewd, potential taxpayer, disagrees with the tax collectors.

A call to Taysa Peterson, a spokeswoman for Governor Brewer who sent out the news release about Amazon.com, was not returned this morning.

The way we figure it, that news release must have left out the part in which Brewer agreed to let the company keep flouting its responsibility and not pay any back taxes.

David Leibowitz, spokesman for Phoenix Mayor Phil Gordon, says no deal was struck at the Phoenix level about taxes.

Amazon.com has a sales tax license on file with the city of Phoenix, Leibowitz confirms. But whether the company actually pays city sales tax is a question that can't be answered due to taxpayer privacy rules.

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19 comments
Spiritwheel1234
Spiritwheel1234

Just another day for multinationals and their ilk. Complaining about 3000 job losses is a shell game. How many folks in Az. lost jobs and how many stores had to close because of the breaks these companies recieve? I daresay it would be quite a bit more than 3000. These stores paid the tacks (sorry but my ecks key is disabled) and helped their communities thrive. Pay your fair share and quit screaming poor mouth. Seems to be plenty of money to pay off politicians.

Bob
Bob

It takes the tokers at the New Times to bring you the real one sided news. Since they are free they make good kitty litter liners.

Bob
Bob

3000 jobs generates enough taxes to support about 300 illegals and their spawn. What are you complaining about?

crazybaldhead
crazybaldhead

In a nutshell, Bob, we're complaining about the double standard. Multinational corporation that can provide jobs=ass kissing from the state. Small local business incorporated in Maricopa County...sorry, we're gonna need some cash from you. You will collect our fees, transcribe the totals and forward them monthly. I for one would like to know how much of the Arizona Department of Revenue's revenue goes toward collecting revenue? Flat tax and fire the parasites, that's what I say

ExpertShot
ExpertShot

Bob likes our public officials to engage in graft (granting Amazon a tax holiday while making all other business pay for Amazon's share) in order to get the big bucks it takes to get elected here.

Jwphx
Jwphx

I can guarantee you (in fact I have had it happen to me) that if I did not, as a business with a physical location in Arizona,  collect Arizona Sales Tax on sales to my customers in Arizona, when the Dept of Revenue came to do an audit, I would be paying it out of my pocket with penalties and interest.

Jason
Jason

I guess all the people living in Phoenix's barrios will have to get their welfare money from some place else.

Walter Concrete
Walter Concrete

Why are the tax assess bitching?    If they owe taxes then take it like they take ours.   If not then stop pissing and moaning because Amazon follows the law.    Going public is a bad decision.    It shows a lack of class and professionalism.    Maybe we'll lose 3,000 jobs instead.     That would be real smart.    Let's start with the people who run the tax enforcement department.     I'll bet the IRS gets there money.

betty
betty

I sell items online.  The state law only requires you to charge tax on items being shipped within your own state.  If you ship out of state no tax is charged.

teknik1200
teknik1200

if you also have a business in that state, you must pay sales tax.

for example, if you buy something online from apple and they have an apple store in your state you pay the sales tax.

Mistalee
Mistalee

The confounding factor here is the question of point of sale when a company has a central locations where orders are placed and several locations in other states where those orders may be filled. Where did the sale actually occur? Where the order was received or where the item was shipped from? 

AZIndependentThinker
AZIndependentThinker

The sales tax laws say that the tax is on the consumer regardless of where the item comes from. When the retailer has a physical location in the same state as the consumer than the retailer is required to collect the tax at the point of sale and remit it to the state. If the retailer is not located in the same state as the consumer then the state cannot require the retailer to collect the tax, and instead the consumer is required to pay the tax to the state on their own. Since Amazon has a physical presence in AZ the state can require them to collect sales taxes on purchases by AZ residents. It's totally ludicrous that our state government is exempting Amazon from having to do this but requires other retailers with a physical presence to collect the tax.If Amazon had no physical presence in AZ then this wouldn't be an issue. Amazon's argument that their distribution centers are a subsidiary is ridiculous. Any way you want to cut it, Amazon has a physical presence in AZ and should be required to collect sales tax on their AZ based retail sales just like other retailers located here.

Arizona Native
Arizona Native

WHAT HAPPENED TO ALL THE LAWS!! WHY IS JOE NOT OUT THERE WITH HIS GOON SQUAD ROLLING UP THE MANAGERS AND LOOKING THE DOORS UNTILL THE REVENUE DEPARTMENT GETS THERE; THEY ARE BREAKING THE LAW!!!!!!

eat it
eat it

He's too focused on nabbing 6 or 7 people at every media frenzied event he puts on with your tax dollars.. come on AZ Native.. Joe is out there doing the work that matters!Also, you shouldn't yell so loud, some of us are sensitive to caps.And realistically, we try to tax amazon who sells items nationally, they will leave, take the jobs with them.. and I wouldn't blame them, I'd see them making a nice little home in a tax haven such as Montana or Delaware.

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