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Amazon and Texas Strike Deal on Sales Tax

(CN) - settled a $269 million sales tax bill from Texas by agreeing to collect sales tax for purchases in the state beginning July 1.

Amazon and Texas Comptroller Susan Combs said in a joint statement Friday that the truce will create more than 2,500 jobs and that Amazon will make more than $200 million in capital investments in the state.

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

Amazon said it agreed to the settlement in spite of continuing to believe that "the assessment was without merit," according to a 10Q form filed with the SEC on Friday.

Amazon disclosed in September 2010 that it had received the bill from Combs' office for purchases by Texas residents from December 2005 to December 2009.

Amazon has operated a distribution center in Irving, Texas, near Dallas-Fort Worth International Airport, since 2006.

At the time, Amazon said the distribution center is owned by a subsidiary, KYDC LLC, which has the same address as Amazon's Seattle headquarters.

Both Amazon and Combs urged Congress to pass laws regulating sales tax for online sales.

"Congress should enact federal legislation that will give states access to revenues that are already due, which would resolve this issue fairly for all retailers and all states," Combs said.

Paul Misener, Amazon's vice president of global public policy, said the company supports the creation of a "simplified and equitable federal framework" to give states the ability to collect sales tax.

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