Amazon doesn't like Texas legislation, so Perry vetoes it

Whose side is Gov. Rick Perry on?

Don't answer that. All the answers are political: He's on the side of the Rick Perry for President Campaign, or he's on the side of prosperity for hard-working Texans, or he's somewhere else.

But with the state in such dire economic straits that it is targeting public schools with $4 billion in budget cutbacks, he used his first veto after this year's legislative session to scuttle a bill aimed at making sure all retailers, online and brick-and-mortar, are on equal footing as far as collecting sales taxes?

And that when the state is pursuing legal action against the Big Daddy of all online retailers, Amazon.com, because it owes $269 million in uncollected sales taxes, interest and penalties from 2005 to 2009?

And a spokesman for Comptroller Susan Combs, whom Perry has criticized for seeking the money from Amazon, says the governor's veto won't affect that case?

Try telling that to Amazon and its attorneys. Make sure they don't argue to a judge that the company shouldn't have to pay when Texas officials can't agree on what the state policy should be.

Federal law says any retailer with a physical presence in a state should collect taxes according to state policy. Combs says Amazon owes Texas taxes on sales from its distribution center in Irving -- which Amazon says is owned by a separate company, but because it doesn't do anything but Amazon's business it's hard to tell the difference.

HB2403, which Perry vetoed last week, said specifically that such closely related distribution centers meet the physical-presence test for collecting sales taxes. Combs says Amazon already met that test. The bill was a belt-and-suspenders type of backup.

In his veto message, the governor said he had "serious concerns" about the bill's "impact and appropriateness." He feared its consequences.

Translation: Amazon didn't like it and has threatened to close its distribution center.

"My strong preference is to conduct a thorough policy discussion with Texas lawmakers, consumers, retailers and technology experts -- and with other states and even the federal government -- about interstate commerce and the structure of state sales taxes in the 21st century," Perry said.

But that policy discussion has taken place. Forty state governments and the District of Columbia organized it in 2002 and came up with the Streamlined Sales & Use Tax Agreement.

Perry could have joined the conversation -- after all, he has been governor since late 2000.

His veto message shows he doesn't have a better idea. He just says there should be one.

Amazon isn't satisfied with SSUTA and wants a "federal solution" on the Internet sales tax issue.

"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."

Of course, that "national approach" won't happen unless Congress adopts it. Until then, Amazon wants to go on making billions of dollars on sales and not collecting state taxes. So long as that happens, Amazon enjoys an advantage over local retailers who do collect sales taxes.

Advocating a federal approach to any problem is atypical for Perry. This is the guy whose day is not complete without a rant against what he says is the "increasingly inappropriate federal encroachment into the lives of Americans."

So, whose side is the governor of Texas on?

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