tax notices paying off, Tennessee reports

photo Aerial of the Amazon distribution center in Chattanooga/Hamilton County shot March 5, 2012.

NASHVILLE -- A law that requires to begin collecting sales tax in Tennessee doesn't take effect until 2014, but one provision that became effective immediately appears to be having some effect.

Consumer use tax collections in April were $571,197, an increase of $342,964 or 108.1 percent from April 2011. That appears to be directly related to a provision in the law that requires Amazon to begin notifying its Tennessee customers immediately that sales tax payments are already required by state law.

"It's reasonable to think that April's increase in consumer use tax ... is due to increased attention to the subject via the notices and the increased media attention," Revenue Department Billy Trout said.

Assistant House Republican Leader Kevin Brooks, R-Cleveland, handled the Haslam administration's Amazon bill.

"This was the agreement that was reached by all parties to allow to keep 3,500 jobs in our state," Brooks said. "This was a jobs bill."

Amazon has built two giant distribution centers in Hamilton and Bradley counties. Amazon's brick-and-mortar competitors and their legislative allies argued that allowing the internet-retailing giant to continue to avoid collecting sales tax as traditional retailers do was unfair.

They threatened continued legislative attacks and litigation, leading to Amazon warning that it could abandon the centers, then under construction. Eventually, Republican Gov. Bill Haslam and Amazon struck a deal that Amazon would begin collecting sales taxes from online purchases in 2014, absent a federal solution to the issue of online sales and collection of sales taxes.

Brooks noted that many people he sees are surprised that they legally owe the tax if the retailer does not collect it.

"This needs to be settled at the federal level," Brooks said.

U.N. Agenda 21

Meanwhile, Brooks is having less success on another front. Haslam is on the traditional post-legislative session bill-signing spree, but this week he declined to sign a Brooks resolution that condemns a United Nations' proposal on environmental sustainability known as Agenda 21.

The resolution, which has no legal effect, attacked the U.N. plan as "insidious."

"Resolutions are position statements by the General Assembly, not a law to be implemented," Haslam spokesman David Smith said by email Friday when asked why the governor did not sign the measure.

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"The governor doesn't support Agenda 21, but he didn't feel compelled to and isn't required to take any action on the resolution," Smith said.

Agenda 21 was never approved by the U.S. Senate and has no force of law in the U.S.

Brooks said while his condemnatory resolution has no legal impact, it does express the General Assembly's views and is now part of the official record of the recently ended 107th General Assembly.

"I don't think he refused [to sign it]," said Brooks, offering a brighter take on the governor's action -- or non-action. "I think he allowed it to go into the chapter without his blessing."

The lawmaker said, "I look forward to having a discussion with the governor about that. But in the meantime, it does not change the fact that 73 of us in the House and more than a majority in the Senate expressed our intentions."

Bills signed

Bills Haslam signed this week include:

• Legislation sponsored by Rep. Richard Floyd, R-Chattanooga, which requires local beer boards and the state's Alcoholic Beverage Commission to formally consider taking action when one or the other suspends or revokes alcohol licenses.

• Senate Speaker Pro Tempore Bo Watson, R-Hixson, sponsored the Senate version, which was sought by Chattanooga officials.

• A bill by Sen. Mike Bell, R-Riceville, that completes an economic development package for the Olin Corp. in Cleveland. It basically amounts to a swap on existing state incentives pegged to Olin's huge investment in more environmentally friendly technology.

Rep. Eric Watson, R-Cleveland, handled the House version. It authorizes a 1.75 percent tax credit per year for seven years against the franchise and excise tax for a $100 million project eliminating mercury from Olin's manufacturing process and operations in Tennessee.

• A bill sponsored by Rep. Vince Dean, R-East Ridge, and Sen. Bo Watson, that creates a mandatory 15-year sentence for offenders attempting to commit a dangerous felony with a firearm upon a second conviction.

• A bill by Sen. Andy Berke, D-Chattanooga, which says that emergency rescue workers who test negative for HIV but later test positive are presumed to have acquired the disease in the line of duty and thus suffered a disability.

• Legislation from Rep. Eric Watson, who is House Judiciary Committee chairman. It allows a person who has been charged with, but not convicted of, a violent felony to participate in a drug court treatment program.

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