Amazon filed a lawsuit in Texas state court as
part of its challenge of a $269 million claim for uncollected Internet sales
taxes dating back to 2005 when Amazon opened operations in Texas. In September 2010 the Texas
Comptroller of Public Accounts demanded the $269 million of Internet
sales taxes, but refused to provide Amazon with the audit claiming that the
audit was protected by attorney client privilege since the audit was prepared
by an attorney. In December 2010 the Texas Attorney General agreed with the
Comptroller's claim of attorney client privilege leaving Amazon little choice
but to file suit. It makes little sense to me why any company should not be
able to see a sales tax audit whether the claim is $100 or $269 million, but
the claim of attorney client privilege seems wrong since tax payers should be
able to see tax audits.
This will be an interesting case to watch as this
appears to be a misuse of the attorney privilege. What do you think?