The Chattanoogan who speaks for state House Republicans said Wednesday that, despite an attorney general’s opinion, he’ll fight legislation to make Amazon collect Tennessee sales tax.
Majority Leader Gerald McCormick also said he doesn’t expect Attorney General Bob Cooper’s opinion to affect construction of distribution centers in Hamilton and Bradley counties.
In fact, Gov. Bill Haslam’s office is talking with Amazon officials about building three more facilities in Tennessee.
“We are working with Amazon to grow jobs in Tennessee through the current project and potential expansion plans,” Haslam’s press secretary, David Smith, said Wednesday.
The nation’s No. 1 Internet retailer is spending $139 million to build distribution centers in Hamilton and Bradley counties. It plans to create more than 1,400 full-time jobs and more than 2,000 seasonal slots.
Tuesday, Cooper issued a legal opinion saying proposed legislation that could force Amazon to collect taxes on Tennessee sales is constitutional.
Cooper’s opinion appeared to support the contention that building distribution centers in the state creates a physical presence, or “nexus.” Under U.S. Supreme Court rulings, states cannot compel out-of-state retailers to collect sales taxes from in-state customers unless they have a nexus.
McCormick said he assumed the opinion would back the constitutionality of the legislation, which was sought by the chairmen of the Senate and House Finance Committees, Sen. Randy McNally, R-Oak Ridge, and Rep. Charles Sargent, R-Franklin.
“They asked [for the opinion] because they couldn’t pass the bill anyway,” McCormick said, adding that he will do “everything to make sure” the bill doesn’t have the votes if it comes up again.
McNally said he would welcome Amazon jobs in Tennessee “but at what price to get those jobs?”
“Is that fair to existing businesses?” he asked in a telephone interview.
McNally said the bill was postponed until January, but he’s waiting to see what comes out of the state’s negotiations.
“I’ve got confidence that the current revenue commissioner and governor are able to negotiate with Amazon,” he said.
McNally said he believes the attorney general’s opinion “knocks the props out of the argument Amazon used before our committee.”
Amazon officials could not be reached for comment Wednesday.
The company maintains that its fulfillment centers, where orders are processed and merchandise shipped, are “separate and apart” from its retail business.
In May, Amazon said it is looking at building three more distribution centers in Nashville or Knoxville — or possibly splitting the centers between them.
According to a state filing, the Internet retailing giant could invest $180 million in those centers and employ about 1,700 full-time workers and 2,000 part-time or seasonal workers within two years.
Haslam has said he continues to back the Bredesen administration’s commitment to Amazon that the company will not be required to collect state sales taxes.
Legislative analysts have estimated that Tennessee government would reap an additional $7.9 million a year under the legislation while local governments would see about $2.7 million.
Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...
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