AUSTIN – The Texas House has approved a bill intended to expand the number of Internet companies that must collect Texas sales tax.

The bill passed Tuesday on a 122-23 vote. Republican Rep. John Otto said it would force Internet-based companies like to collect sales taxes if they have affiliate in Texas.

Under a U.S. Supreme Court ruling, if a company does not have an office in Texas, it does not have to collect Texas sales tax. Customers are supposed to pay it, but they usually don’t.

The bill expands the definition of physical presence. Critics said it would stifle economic growth.

Amazon recently threatened to shut down a warehouse owned by a subsidiary in Irving after the state comptroller insisted that constituted a physical presence as well.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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