Amazon's (not so secret) war on taxes
By Peter Elkind with Doris Burke @FortuneMagazine May 23, 2013: 6:42 AM ET
(Fortune)
In August 2010, Cheryl Lenkowsky, an auditor for the Texas state comptroller, sent a letter to a top tax executive at Amazon.com's Seattle headquarters. At that point, Amazon had been selling a wide array of merchandise to Texans for 15 years without collecting a penny of sales tax from them. Tax-free shopping was a delight for customers, a vital competitive edge for the company -- and a hemorrhaging wound for state government.
Now, Lenkowsky informed the company, all that was about to end. Texas's audit, which had gone back four years, had resulted in an "adjustment": a bill for uncollected taxes, plus penalties and interest -- $ 268,809,246.36 in all. Added Lenkowsky helpfully: "We have included a pre-addressed envelope for your payment convenience."
Amazon responded fiercely. It appealed the assessment. It sued the comptroller for her audit records. It lobbied Rick Perry, Texas's business-friendly governor. Most of all, Amazon insisted it had no "physical presence" in Texas -- the basis for the tax claim -- despite owning and operating a 630,800-square-foot distribution center (with an Amazon.com flag in front of it) in a Dallas suburb. When all that didn't work, the company shuttered the facility and threw its 119 employees out of work, vowing to abandon the Lone Star State.
Thank you Cnn. From reetime news technology.
