A threat to local jobs

A threat to local jobs

July 28th, 2011 in Opinion Free Press

It is reasonable that former Gov. Phil Bredesen made an agreement with online retailer Amazon so Seattle-based Amazon would not have to collect Tennessee sales taxes when it builds two large distribution centers in Hamilton and Bradley counties. Current Gov. Bill Haslam stands by the deal.

After all, customers will not be walking into the Tennessee centers to make purchases, as they might walk into a retail store and make purchases on which sales taxes would of course be collected. The distribution centers simply don't amount to stores.

But for months, some state lawmakers have been trying to renege on the promise to Amazon and force the company to collect Tennessee sales taxes after all.

That is a dangerous economic game and a serious threat to local jobs. Amazon is spending $139 million to build the Hamilton and Bradley County facilities, which will provide 1,400 full-time jobs and about 2,000 more part-time jobs. That is economic growth that can be of tremendous benefit to our area. And yet it is being threatened by lawmakers who now propose to give Amazon only a two- or three-year delay after Amazon opens the distribution centers before it must begin collecting sales taxes.

Apart from the fact that Amazon's distribution centers are not traditional stores that would naturally be expected to collect sales taxes, the threat to force Amazon to start collecting the taxes, after it was told it would not have to, could give Tennessee a reputation for not upholding its agreements.

"The state has to keep the deals it's made, ..." said House Majority Leader Gerald McCormick, R-Chattanooga. "We don't need to get the reputation of changing deals after we've signed off on them."

Reneging now on the agreement with Amazon is a bad idea that could have long-term negative consequences not only for our local economy but for the economy of the entire state.