Katherine Braun sorts packages toward the right shipping area at an Amazon.com fulfillment center in Goodyear, Ariz., in this Associated Press file photo. Some Tennessee lawmakers object to Amazon not paying sales taxes on products that will be shipped from its Hamilton and Bradley fulfillment centers.
NASHVILLE — Sales by online retailers like Amazon.com, which is building two distribution centers in Southeast Tennessee, will cost the state as much as $3 billion in revenue and the loss of over 10,000 jobs over the next five years , according to a new analysis released today.
The study was commissioned by a national group of traditional brick-and-mortar retailers, ranging from small mom-and-pop stores to giant chains such as Wal-Mart.
“If the state is deprived of the $456 million-plus [annually] in sales tax revenues, there are fewer dollars to provide state services,” said Sharon Younger, president of Younger Associates, who was hired by the Alliance for Main Street Alliance to analyze figures from a previous study by the University of Tennessee study.
She told reporters at a news conference that the figures take into accounts other lost jobs in the private sector and other tax revenue declines because those who lose jobs will spend less.
The Alliance’s Tennessee spokesman, Mike Cohen, said the study underscores the need by Gov. Bill Haslam to revisit the sales tax-collection exemption that his predecessor, Phil Bredesen, struck with Amazon to get the giant Internet retailers to locate the warehouses in Tennessee.
The agreement says the company can continue not collecting sales taxes despite having a physical presence in the state. Tennessee retailers’ contend that online retailers like Amazon enjoys an unfair advantage because they do not have to collect state and local sales taxes that range from 7 to 9.75 percent.
Cohen pointed to an agreement Amazon struck earlier this month with California to begin collecting sales taxes within 12 months and a similar agreement with South Carolina to begin collecting sales taxes within 4 1/2 years.
He said while Alliance for Main Street Fairness “applauds” Haslam’s efforts, “we hope there’s pressure on Gov. Haslam; we hope there’s pressure on Amazon to do the right thing and they’ll do in Tennessee what they’ve done in California. Do the right thing. Get on a level playing field. Nobody’s afraid of competition ... We just don’t want goverernment saying someone can have an advantage.”
During today’s news conference, Nashville businessman Allen Doty, a partner at Cumberland Transit, a bicycle and outdoor recreation store, said he has some customers who visit the store, check out products and then leave to purchase them online where they do not have to pay sales taxes.
The Younger analysis does not take into account the $139 million Amazon is spending to build the two warehouses nor the 1,500 full-time employees and estimated 2,000 seasonal employees Amazon is hiring. The company also has plans to open a warehouse near Nashville.
Read more in tomorrow’s Times Free Press.
Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...