Amazon responded fiercely. It appealed the assessment. It sued the comptroller for her audit records. It lobbied Rick Perry, Texas’s business-friendly governor. Most of all, Amazon insisted it had no “physical presence” in Texas—the basis for the tax claim—despite owning and operating a 630,800-square-foot distribution center (with an Amazon.com flag in front of it) in a Dallas suburb. When all that didn’t work, the company shuttered the facility and threw its 119 employees out of work, vowing to abandon the Lone Star State.
As it threw its fit, Amazon said it had to leave Texas—Texas!—because of its “unfavorable regulatory environment.” Fortune makes a fairly big deal of how the state called Amazon’s bluff on the extortion and ended up getting the company to collect Texas sales last summer along with a pledge of 2,500 jobs and $200 million in investment.
But it’s a mark of the out-of-whack relationship between state and (powerful, out-of-state) corporation that Texas didn’t prosecute Amazon for brazenly breaking the law. Texas didn’t even bother to collect on Amazon’s overdue tax bill. It wrote off the $269 million in uncollected taxes owed as part of the 2012 tax deal with the Seattle company.
With all this background the notion of the company’s policy chief, Paul Misener, wrapping Amazon in the flag is nausea-inducing:
With his cheerful demeanor and gleaming smile, Misener conveys the impression that what cynics might view as resisting taxes is in fact a noble quest to spread jobs and opportunity. Who could be against that? Indeed, Amazon says it’s driven strictly by principle. “Far from an e-commerce loophole,” Misener testified in Congress last August, “the constitutional limitation on states’ authority to collect sales tax is at the core of our nation’s founding principles.” As Misener puts it in an interview with Fortune, “We feel very good about our position because it’s a constitutional right.”
Our modern-day “robber barons in chinos” are so much better at PR than the sharper-dressed originals. But at base, the Silicon Valley ethos is Randian libertarianism dressed up in gee-whiz utopianism and TED-talk guruspeak.
That Amazon is not physically of Silicon Valley because Jeff Bezos wouldn’t collect taxes in California.
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