DALLAS (CN) – Amazon.com is closing its distribution center in Irving, Texas due to a sales tax dispute with the state. Texas last year billed Amazon $269 million for 4 years of purchases by Texas residents, so the company said it will shutter its Texas site and kill its plans to create 1,000 jobs in Texas.
In a Thursday letter to employees about the tax dispute, Amazon said that “despite much hard work and the support of other Texas officials, we’ve been unable to come to a resolution with the Texas comptroller’s office.”
“Closing this fulfillment [distribution] center is clearly not our preferred outcome.”
In the letter, Amazon told its employees that it was planning to expand its presence in Texas, create more than 1,000 jobs and invest millions in the state, but it must reverse course.
Texas last year billed Amazon $269 million for purchases by Texas residents from December 2005 to December 2009.
Allen Spelce, spokesman for Texas Comptroller’s Office, told the Dallas Morning News: “We regret losing any business in the state of Texas. But our position hasn’t changed: If you have a physical business presence in the state of Texas, you owe sales tax.”
The Morning News reported that the Comptroller’s Office began investigating Amazon in May 2008 after the newspaper questioned why the company did not charge sales taxes despite having a physical presence in the state.
Amazon has operated the suburban facility near Dallas-Fort Worth International Airport since 2006.
Amazon argued that the distribution center is owned by a subsidiary, Amazon.com KYDC LLC, which has the same address as Amazon’s Seattle headquarters.