Did Amazon blink? Also, are you about to be audited because of your Amazon purchases?
Among the many rather thuggish hissy fits Amazon has thrown at states who want it to collect sales taxes like all the other retailers within their borders, the fit the behemoth from Seattle threw at Texas was among its nastiest: when the state presented it with a bill for $269 million dollars due in uncollected sales taxes, the company said it would fire all of its 119 employees there and close a major distribution center in the town of Irving if they were actually forced to, er, pay their taxes. (See the earlier MobyLives report.)
When the state didn’t back down, Amazon said heads would roll this week but, as a report from the Austin Statesman observes, “As of Wednesday, however, Amazon was still operating the Irving facility. Also, a hiring firm is interviewing to fill temporary jobs at the center, the Dallas Morning News reported.” (The Dallas Morning News does not post articles for non-subscribers.)
Amazon would only confirm that, er, they hadn’t closed the Irving center like they’d sworn to God they would.
Meanwhile, conflicting bills — one that would allow Amazon to do whatever they want, and two that would make them pay their taxes — remain stalled in the Texas legislature.
In a related story, a report on PR Newswire asks, “Is America’s Most Reputable Company Putting Taxpayers at Risk of an Audit?”
As the story notes, Amazon was recently rather shockingly named in a Forbes Magazine survey as “the most reputable company in America.”
But taxpayers preparing their returns this April may soon be questioning that accolade, as many are in for a bit of a shock if they’ve been frequenting the online-only giant.
By refusing to collect sales taxes, even firing small business partners in five states and threatening to lay off employees in Texas to avoid having to do so, Amazon has exposed its customers and forced them to calculate, track and remit the sales taxes from products purchased on its Web sites.
The catch: Most of their customers don’t even know they owe the tax, and Amazon goes to great lengths to avoid informing them of the truth.
How does this affect tax returns?
By not collecting their customers’ sales taxes at the point of purchase much like most retailers across the country are required to do, Amazon’s customers must report on Tax Day those taxes owed on their state income tax returns. But because most of their customers are unaware of this obligation, many fail to report the tax owed on their returns, and as a result, states are now cracking down and Amazon’s customers could be audited or penalized.
Firing employees to avoid collecting sales taxes… Leaving customers in the dark and vulnerable… That certainly doesn’t seem to fit the definition of “reputable.”
Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.