AUSTIN -- Gov. Rick Perry on Tuesday vetoed his first bill of the year, a measure that would have expanded the number of Internet retailers required to collect Texas sales taxes.
The bill, backed by major brick-and-mortar stores but opposed by the giant Amazon.com online retailer, would have required companies that contract with marketing companies in Texas to collect the tax. Federal law requires companies with a physical presence in a state to collect that state's sales tax, and the bill would have expanded the definition to include distribution centers and warehouses.Amazon.com threatened this year to close an Irving warehouse after state Comptroller Susan Combs demanded $269 million owed in sales taxes, interest and penalties from 2005 to 2009, saying the warehouse constitutes a "physical presence."But Perry defended Amazon, criticized Combs and pledged to work with the Legislature to keep the Amazon facility, which employees about 120, in Texas.Perry's veto doesn't affect the $269 million demand, said a spokesman for the comptroller.The law defines a company as being engaged in business in Texas if it has aspects that include "an office, place of distribution, sales or sample room or place, warehouse, storage place or any other place of business," DeSilva said.Amazon officials said the company favors a "federal solution" to the question of how to approach online retailers."We've long supported a truly simple, national approach, evenhandedly applied," Paul Misener, an Amazon vice president, said in a statement. "This is federalism at work, and many states are making the right decision to seek a federal solution."The status of the Irving warehouse wasn't clear. Amazon spokesmen did not respond to e-mailed inquiries.Advocates said the Texas bill would have brought hundreds of millions of dollars in new state revenue; opponents said it would have added nothing to state coffers and shut down dozens of small businesses.Texas store owners have said Internet retailers have an unfair price advantage because they are not required to collect state sales tax. But Perry said he feared that the bill would have unintended consequences."My strong preference is to conduct a thorough policy discussion with Texas lawmakers, consumers, retailers and technology experts," Perry said.Staff writer Scott Nishimura contributed to this report, which includes material from The Associated Press.
