Business Briefcase:

Business Briefcase:

February 19th, 2012 by Staff Report in Business Around the Region

Internet tax key to no income tax

Taxing sales by Internet companies like Amazon will help Tennessee avoid having to adopt a state income tax, U.S. Sen. Lamar Alexander, R-Tenn., said last week.

Alexander, a former Tennessee governor, said in a speech on the Senate floor that the Marketplace Fairness Act he is pushing would bring a fairer and broader sales tax system and help Tennessee avoid having to turn to a payroll tax.

Alexander said the bi-partisan bill he is sponsoring along with U.S. Sens. Mike Enzi, R-Wy., and Richard Durbin, D-Ill., will require Internet merchants to collect state and local sales taxes based upon where the merchandise is sold.

The measure would "close a 20-year loophole that distorts the American marketplace by picking winners and losers, by subsidizing some businesses at the expense of other businesses and subsidizing some taxpayers at the expense of other taxpayers," he said.

Alexander said in Tennessee "state income tax" are probably the three worst words in the vocabulary.

"Collecting tax on sales from everybody who owes it could not only reduce our sales tax but help us avoid a state income tax," he said.

Under a 1992 Supreme Court decision, Internet and catalogue companies don't have to collect sales taxes on their products unless they have a retail store or a "physical nexus" in a state.

Tennessee sales up for 2 years

Taxable sales for December transactions were up nearly 7.5 percent in Tennessee over a year ago, according to the state Department of Finance and Administration. For the last six months of 2011, sales tax collections in the state were up by more than 6.5 percent compared with the same period of 2010.

"For nearly two years, we've seen growth in sales tax collections, with January being the 22nd consecutive month in which sales taxes have recorded positive growth," Finance and Administration Commissioner Mark Emkes Emkes said in his announcement of the latest sales tax collections. "Holiday sales brought positive growth across Tennessee and the nation, indicating that the economy continues to slowly recover from the worst recession on record."

Chrysler pulls aid request from U.S.

Chrysler says it will no longer seek a U.S. Department of Energy loan to fund the development of gas-electric hybrids and electric vehicles. The automaker said last week that the Department of Energy's proposed terms "were very restrictive and compliance would have negatively affected our operational flexibility."

Chrysler CEO Sergio Marchionne said last April the company needed the loan to be competitive.

Chrysler initially applied for more than $7 billion in 2008 under the DOE's Advanced Technology Vehicle Manufacturing program, but later reduced the request to less than $3.5 billion.