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Amazon directs business toward states not collecting online sales tax

Updated: July 10, 2011 2:20AM

PHOENIX — Inc. says it plans to open a fourth Arizona distribution center, giving the state a nod for its hands-off stance on the issue of pressing online retailers to collect sales tax on shoppers’ purchases.

Seattle-based Amazon’s new 1.2-million-square-foot facility, planned to open in an existing building this fall, will join three existing distribution centers on the west side of the Phoenix metro area.

Amazon declined to provide specific figures but said the new facility will add hundreds of jobs, giving the company an Arizona work force of more than 3,000.

As some states facing budget squeezes press for online retailers to collect sales taxes, Amazon is steering business toward states that are not.

Amazon also announced last week that it would open a fourth Indiana distribution center just outside of Indianapolis. Indiana officials four years ago offered not to push the tax issue in recruiting Amazon to the state.

On the other hand, the Texas comptroller in February demanded that Amazon pay $269 million in back sales taxes because a subsidiary operated a warehouse near Dallas. Amazon is appealing the order. And California recently approved a new law forcing online retailers to collect sales tax there. Amazon reacted by cutting ties with its advertising affiliates in that state.

Amazon’s appreciation to Arizona comes as the state starts prodding Arizonans to pay it themselves.

Arizonans are obligated under law to pay use tax — a version of the sales tax — on items they purchase for nonbusiness use, and they are supposed to report and pay that amount to the state if the seller doesn’t.

State officials say individuals typically don’t do that, but a new state law requires taxpayers to report unpaid tax obligations as part of their state income tax returns. AP

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