Arizona Bills Amazon for $53 Million in Sales Tax - 02/13/2012

SEATTLE – The state of Arizona has served Amazon a tax bill for $53 million in uncollected sales tax, according to documents the online company filed with the Securities and Exchange Commission (SEC).

According to Arizona, Amazon should have collected transaction tax similar to sales tax on multiple transactions from March 1, 2006 though Dec. 31, 2010. Though the online company has so far refused to comment publicly to the media, it did dispute the issue in its briefing with the SEC.

"We believe that the assessment is without merit and intend to vigorously defend ourselves in this matter,” Amazon stated in its 10-K form. "Depending on the amount and the timing, an unfavorable resolution of this matter could materially affect our business, results of operations, financial position or cash flows.”

Anthony Forschino, assistant director at the Arizona Department of Revenue, has refused to comment to the media, stating taxpayer confidentiality laws. The department has said in the past that Amazon should have been collecting in-state sales taxes, according to a Phoenix Business Journal report.

Amazon has long been against consumers paying sales tax on product purchased online. In November, it joined the National Retail Federation (NRF) in support of the Marketplace Fairness Act, which would restore each state’s right to enforce state and local sales and use tax laws, as well as exempt online retailers with less than $500,000 in annual revenue from collecting and remitting sales or use tax (Response This Week, Nov. 15, 2011).

"(Amazon) strongly supports the measure, (which) will allow states to obtain additional revenue without new taxes or federal spending (and) make it easy for consumers and small retailers to comply with state sales tax law,” Amazon said.

Arizona is not the first state to send Amazon a back-tax bill. In 2010, Texas also sent the online company one for $269 million, and North Carolina was involved in a lawsuit with the E-commerce giant over the release of customer names and addresses in an attempt to collect sales tax money the state said it was owed.

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