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