On February 15, the Mississippi Justice Institute filed a complaint with the Mississippi Ethics Commission seeking information on the Mississippi Department of Revenue’s recent sales tax deal with Amazon, as reported by MississippiWatchdog.org. The complaint comes after a public records request for details of the deal with Amazon, also filed by the Mississippi Justice Institute, was denied by the Department of Revenue.
On February 1, Amazon began collecting sales tax on purchases made by Mississippi residents. The state had been negotiating with Amazon for some time, Mississippi Department of Revenue Commissioner Herb Frierson told the Clarion-Ledger. Under the terms of the deal, if Amazon began collecting sales tax voluntarily, the state “[wouldn’t] go back and do a three-year audit on them,” Frierson said.
On February 15, the Mississippi Department of Revenue issued a proposed rule that could establish nexus in the state for retailers whose gross sales in the state exceed $250,000 per year; this means the department could issue a final rule in less than 30 days. In order to have the documents relating to the Amazon deal made public before then, the Mississippi Justice Institute has requested that the ethics commission conduct an expedited review.
Mike Hurst, the director of the Mississippi Justice Institute, said that many key questions could be answered if the Department of Revenue were to reveal the terms of the agreement, the Watchdog article noted. Hurst said the questions included whether Amazon made the deal with the revenue department in exchange for the agency issuing the proposed sales tax rule; whether the deal was structured to give Amazon an advantage over its competitors; whether the company received a benefit for voluntarily coming to terms with the state; and whether the revenue department agreed to shield third-party sellers on Amazon from collecting sales tax, the article explained.
In denying the Mississippi Justice Institute’s public records request, the Mississippi Department of Revenue wrote: “Any agreement made between Amazon.com and the Department falls within this strict rule of confidentiality and cannot be provided at this time. Additionally, any written communications or other documents related to this agreement are confidential as well and cannot be divulged without a proper judicial order.”
In its complaint, the Mississippi Justice Institute argued that any company that is not legally required to pay a use or sales tax to the state cannot fall under confidentiality requirements of the state code dealing with sales tax, income tax, and corporate franchise tax.