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Amazon.com agrees to collect Texas sales taxes

Amazon.com has settled a long-running dispute with Texas and will begin collecting state sales tax on July 1, the state and the online retailer announced Friday.

As part of the agreement, Amazon, which closed an Irving distribution center because of the dispute, said it will create at least 2,500 jobs in Texas and make at least $200 million in capital investment. Amazon said it will announce details later.

In September, Texas Comptroller Susan Combs sent Amazon a $269 million bill, covering taxes she said the company should have collected between 2005 and 2009. Combs said the agreement "resolves all sales tax issues between Texas and Amazon."

The move is a reversal for Amazon, which has fought against being forced to collect state sales taxes.

R.J. DeSilva, a spokesman for Combs' office, said the comptroller isn't disclosing the amount because it is "confidential taxpayer information." Amazon said in a federal filing it made "an immaterial payment to the state."

Amazon also said it maintains that the $269 million assessment "was without merit."

"Amazon looks forward to creating thousands of new jobs in Texas, and we appreciate Comptroller Combs working with us to advance federal legislation," Paul Misener, Amazon's vice president of global public policy, said in a joint news release with Combs.

"We strongly support the creation of a simplified and equitable federal framework, because congressional action will protect states' rights, level the playing field for all sellers, and give states like Texas the ability to obtain all the sales tax revenue that is already due."

Combs, in the release, said: "We thank Amazon for partnering with us to find a solution that works for our state. This is an important step in leveling the playing field in Texas."

She said Congress should enact legislation that gives states "access to revenues that are already due."

Texas estimates that it loses about $600 million a year in sales tax to Internet sales.

Combs has said Amazon was required to collect sales taxes on Texas transactions because it was operating a distribution center in Irving, constituting a physical presence.

Amazon has disputed that claim. The company closed its Irving center after the dispute arose, with employees there offered relocation to other states, Amazon said Friday.

This report includes material from the Star-Telegram archives and The Associated Press.

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