published Thursday, June 30th, 2011

Ruling questions Amazon’s edge

Controversy has waned but not died over’s exemption from collecting sales taxes on goods shipped to Tennesseans due to its new physical presence in the state. A new ruling by the state attorney general’s office appears to support a proposed law to require sales tax collections in this circumstance and bolsters critics of the exemption.

Atty. Gen. Robert E. Cooper’s opinion suggests that the new plants create the physical “nexus” that is required under a U.S. Supreme Court ruling to invoke a retailer’s liability for collecting a host state’s sales taxes.

Amazon is not likely to concede the point without a legal battle. It may also again threaten to leave the state if it is required to collect sales taxes on sales to Tennesseans. It’s position has been that its new facilities here will merely be “distribution centers” that mainly drop-ship goods to retailers elsewhere.

Regardless, Cooper’s opinion should provide new focus on the legal issue. It should encourage a fair hearing in next year’s legislative session of the proposed law to require facilities such as Amazon’s to collect sales on sales inside the state. And it should prompt Gov. Haslam to renew discussions with Amazon on the sales tax question before the next legislative session begins.

We hardly expect the latter. Haslam has seemed reluctant to risk playing a hand that might end with Amazon canceling its new distribution centers in Hamilton and Bradley counties.

That risk must be tolerated. Brick-and-mortar retailers in Tennessee duly collect sales taxes. Allowing Amazon to skip collections gives it an unfair advantage in sales of similar items. A recent Wall Street Journal story compared the price differential on same-brand and model televisions, cameras and other goods sold by Amazon in competition with other big-box, brick-and-mortar retailers. Amazon’s advantage through sales-tax avoidance is clearly significant, and absolutely unfair.

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bpqd said...

Take one look at their job ad which states that they do not want to hire people with breaks in employment. In other words, they do not want to hire unemployed people. We are providing them with six million dollar tax breaks to get those people jobs. Amazon is taking the money and not fulfilling their half of the agreement. They need to be penalized. That means, they don't get the gift of a six million dollar tax break for job fraud. Tax them like any other business today.

Stop job fraud and tax evasion at Amazon. Hold them to their half of the agreement. Hire unemployed people, you disgusting Wall Street scum.

June 30, 2011 at 9:47 a.m.
SavartiTN said...

Amazon, if I were you, I would just go ahead and take your business to a different state. These people here are just crazy.

June 30, 2011 at 8:39 p.m.
SavartiTN said...

Let's think about it, bpqd, if Amazon hires 1500 people...even at minimum wage...they have just paid $22 million plus in wages that will support the local economy. They will also pay into the unemployment insurance pool. They will pay Federal Taxes. They will pay Social Security taxes. I think those benefits far out weigh that paltry $6 million in sales tax not collected.

Look what Tennessee did for Volkswagon. Over $500 million in incentives. They GAVE them $81 million worth of land. The state paid $30 million to train the workers. How we all seem to have forgotten. Here's the article from the TFP back in July 2008 to refresh your memory.

June 30, 2011 at 8:52 p.m.
SavartiTN said...

FASCINATING! The TFP won't let me paste that link. Look it up July 24, 2008. "Chattanooga: VW Incentives Largest in State."

June 30, 2011 at 8:56 p.m.
SavartiTN said...

Oh yeah, apparently as part of the VW incentive, we agreed to take 1,000 tons of nuclear waste from the Germans. Yay!

June 30, 2011 at 8:57 p.m.
rolando said...

Some anonymous editor wrote up there, "We hardly expect [Gov. Haslam to renew discussions with Amazon on the sales tax question before the next legislative session begins.] Haslam has seemed reluctant to risk playing a hand that might end with Amazon canceling its new distribution centers in Hamilton and Bradley counties."

And rightfully so!

Looking out for the citizens of Tennessee is his job, dude. He rightfully thinks jobs for his people are more important than sending the wrong message to prospective future employers by breaking agreements made by his predecessor.

In short, the Governor thinks first of the citizens, second of the honor of the office he holds, and third of future employers. Falling down at the far distant tail-end is his concern for some half-backed Senator looking for votes in his half-baked District of Oak Ridge...a District on the Federal dole for 70 years.

June 30, 2011 at 10:54 p.m.
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