For years, we've had stories about battles between state governments and Amazon (and, to a lesser extent, other online retailers) over collection of sales tax. Under the law, mail order retailers only have to collect sales tax in states where they have a physical presence. In other states, the end users (the buyers) are supposed to report and pay the sales tax themselves, though almost no one does that. Some states, such as New York, have tried to get around this by declaring anyone who's a member of an affiliate program to represent a physical presence, leading Amazon to kill off affiliate programs
in certain states. When the legal battle over this happened in New York
, a reporter in Texas noted that Amazon appears to have a distribution facility in Texas, and asked lawmakers how come Amazon didn't collect sales tax in Texas
. Amazon apparently tried to tap dance around this for a couple years, claiming that the distribution center is owned by a subsidiary, rather than by the e-commerce firm itself (yeah, nice try).
But things appear to have become a bit more complex since Amazon bought Woot
at the end of June. Woot, of course, is based in Texas. So, that makes it even harder for Amazon to claim a lack of a presence in Texas... and now, the state has sent Amazon a whopping $269 million bill for unpaid sales tax
, going back a few years. Now, it certainly does appear that Amazon was pretty clearly ignoring the law on sales tax here, but it seems like Woot may have to step up how many bags of crap
it needs to sell to help cover the bill.