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Governor Perry: Veto HB 2403, the Texas Amazon Tax!

By: Neil Stevens (Diary)  |  May 24th, 2011 at 02:00 PM  | 

RESIZE: AAA

I like Texas. The state has many great things going for it, including a friendly tax and business climate. However Texas has to keep working to stay on top, so when South Carolina is backing down from its refusal to work with Amazon, and Tennessee has dropped its Amazon tax bill, it’s disappointing and frustrating to see Texas moving forward with punitive taxation against an innovative business that creates jobs in Texas.

So Governor Perry, do the right thing and veto HB 2403. Make Texas an example and strike down this attempt to use government to reverse the free market’s choice of Amazon as a winner in the marketplace.

Texas of all states ought to know the importance of innovation and new business models. Texas made its mark by finding oil, taking it from the ground, and selling it off. Cheap and easy oil was devastating to old businesses. Everyone who relied on horses being vital for transport was hit by the ability to use oil to move around. Texas was so important, even Standard Oil had to rush in and get a piece of the action.

Texas boomed on the new developments. Texas cities grew fivefold, from Beaumont to Dallas to El Paso, from the turn of the century to 1930. This growth in wealth and prosperity clearly has served the basis of the growth since, turning Texas into the dynamic engine of America today. Imagine if, back in 1920, buggy whip makers got together and passed special taxes on the new Texas oil, attempting to smother it in the crib and mitigate the threat to the old ways of transport?

That’s what HB 2403 represents, as do similar bills in other states like California. The old way of doing business is threatened by the new way. And where free market conservatives see a great opportunity, where interstate commerce over the Internet gives the taxpayers a break for once, these tax-and-spend Amazon haters see a “loophole” that must be “fixed” immediately with new, more burdensome taxation.

It’s not the place of government to implement punitive taxation to pick winners and losers in the marketplace. It’s up to the public, the shoppers operating in the free market, to do that. Texans are choosing Amazon.com to save money for other things, stretching their dollars further in the face of the Obama economy. Governor Perry, please veto HB 2403 and take a stand for the principles that have made Texas a great place to live and work.

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  • http://jhpruitt.blogtownhall.com/ kipling

    It is a shame that our Republican controlled House and Senate supported and passed the measure. It is a shame that the Speaker of the House – who loudly proclaims himself a conservative – supports the measure. It is a shame that the potential Senate candidate – Dewhurst – supports the measure.

    May they each reap the political harvest of what they sow.

  • shinglejim

    This is not a special tax on the internet. The tax already exists and is called use tax. The law should be vetoed because no new law is needed. Current law is clear.

    **Texas Tax Code Section 151.101(a) – A tax is imposed on the storage, use or other consumption in this state of a taxable item purchased from a retailer for storage, use, or other consumption in this state.

    **Texas Tax Code Section 151.102(a) – The person storing, using, or consuming a taxable item in this state is liable for the tax imposed by Section 151.101 of this code, and except as provided by Subsection (b) of this section, the liability continues until the tax is paid to the state.

    **Texas Tax Code Section 151.102(b) – A person storing, using, or consuming a taxable item in this state is not further liable for the tax imposed by Section 151.101 of this code if the person pays the tax to a retailer engaged in business in this state or other person authorized to collect the tax and receives from the retailer orr other person a purchaser’s receipt given as provided in Section 151.103 of this code.

    Use tax is the complement to the sales tax, with the only difference being who remits to the state. Under sales tax, the in-state vendor collects from customer and remits to the state. Under use tax, the customer remits directly to the state because the out-of-state vendor is not required to remit.

    The issue is collection of the existing tax. Currently TX has no mechanism for collecting use tax from individual consumers. So they are trying to get Amazon to collect the tax for them. This is against the Commerce Clause if the do not have physical presence.

    With regards to the final point, an affiliate of Amazon operates a DC in Irving, TX. This is why the state claims they have physical presence. I don’t know enough of the facts with regards to who employees the workers at the DC, who owns the DC, etc to opine as to whether this creates nexus or not.

  • lucky364

    Your oil boom reference is in no way similar to this issue. These retailers are not creating any new jobs, they are just taking advantage of a system that allows them to avoid collecting sales tax like a brick and mortar establishment. The oil industry created jobs and wealth that increased revenue for the state as well as profits for the entrepreneurs. All Amazon type retailers are doing is changing distribution routes and shifting jobs from one enterprise to another.

    Bottom line, either a state has a sales tax or it doesn’t. I’m all for less taxation, but allowing different rules for different retailers is in no way equitable.

  • http://www.hakubi.us/ Neil Stevens

    I’m sure everyone who’s an Amazon Associate in Texas, or works for the Amazon distribution center in the state, or anyone who derives benefit from either of the above, will disagree with you.

    But, Governors Haslam and Haley will thank y’all for knocking Texas down a peg and leaving room for states like Tennessee and South Carolina.

  • lucky364

    I’m sure anyone that had their job shifted to an Amazon Associate or used to work in someone else’s warehouse will disagree with you.

    No one really benefited including the people in the State of Texas that had government services reduced because no sales tax was collected on a sale of goods.

    Again, either have a sales tax, or don’t.

  • http://www.hakubi.us/ Neil Stevens

    If you think your sales tax isn’t working, repeal it and replace it with something that does work. Don’t pass punitive, arguably unconstitutional taxes transparently designed by vindictive losers in the marketplace.

  • http://www.hakubi.us/ Neil Stevens
  • GregInFla

    that no one in all the Perry diaries here in the last week has mentioned and that I’ve read, and I’ve read most of the diaries. I did a google to find this diary from back in May. Maybe we can resurrect this diary now.