Online retail giant Amazon.com will close its suburban Dallas distribution center amid a dispute with the state over millions in uncollected state sales taxes, The Associated Press reported Thursday.
The AP obtained an e-mail Thursday sent to Amazon employees by Dave Clark, the company's vice president of operations.
Clark wrote that the center in Irving will close April 12 because of the state's "unfavorable regulatory climate."
Amazon spokeswoman Mary Osako would not say how many employees work at the Irving distribution center.
Texas employees who are willing to relocate will be offered positions in other states, Clark said.
The Irving distribution center, known as a fulfillment center, opened in 2005.
Last year the Texas comptroller's office sent Amazon a demand for $269 million in uncollected sales taxes, plus penalties and interest, from 2005 through 2009.
The state contends that Amazon.com is responsible for the sales tax it has not collected on online sales made in Texas.
The state is seeking money from Amazon because its distribution center in Irving.
Under a 1992 U.S. Supreme Court decision, that physical presence means Amazon potentially could be required to collect sales tax on transactions in Texas, according to legal experts.
Amazon, which reported $34 billion in sales last year, has also been the target of numerous lawsuits filed by other states seeking sales taxes on online purchases.
Amazon officials have not commented publicly on the tax bill from Texas, but the Seattle-based company said in a securities filing last year that it intended to fight the demand.
Amazon filed a lawsuit against the state last month, demanding that it produce the audit that it used to arrive at the $269 million figure.
Allen Spelce, spokesman for the Texas comptroller's office, said Thursday that though "we regret losing any business in the state of Texas," that doesn't change the state's position.
"We feel like if you have a business presence in the state of Texas, you're no different than any other business in the state of Texas, and you still owe sales tax," Spelce said.
He declined to comment further on the state's demand that Amazon pay back sales tax, saying the case remains in the hearings process.
In his e-mail to staffers, Clark said Amazon also is scrapping plans "to build additional facilities and expand in Texas, bringing more than 1,000 new jobs and tens of millions of investment dollars to the state."
Katherine Cesinger, spokeswoman for Gov. Rick Perry, said the governor's office has had "ongoing communications" encouraging Amazon to expand its business in Texas, "and we recently encouraged them to stay in the state."
"We are always mindful of the tax burden on families and businesses in our state, and it is important that Texas clarify the laws regarding this issue to further strengthen the reliability of our tax system and to protect Texas jobs," Cesinger said.
Comptroller Susan Combs has estimated that the state loses $600 million a year from untaxed online sales. The comptroller's office said last year that it has sent demands for payment to other online retailers similar to what it sent Amazon.
Additional information from American-Statesman staff writer Barry Harrell.
