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Legality Of State’s Amazon Tax Deal Questioned

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AUSTIN (AP) – Some experts say a settlement reached between Texas Comptroller Susan Combs and Amazon.com to end Amazon’s sales tax dispute with the state may be illegal.

Austin tax lawyer Buck Wood is former deputy state comptroller and general counsel under the late Comptroller Bob Bullock. He tells the Austin American-Statesman the state constitution prohibits “forgiving” tax debts, and he is concerned that it creates a class of “too big to pay” tax payers who get preferential treatment.

Under its deal with Combs, the online retail giant begins collecting sales taxes July 1 on purchases from Texas, and promises Texas 2,500 new jobs and $200 million in capital investment over four years.

Federal regulatory filings state Amazon made an “immaterial payment” on $269 million in back sales taxes owed to Texas.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

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