Haslam moves to require online retailers collect TN sales tax

Gov. Bill Haslam wants Tennessee to join a growing group of states seeking to force either Congress or the U.S. Supreme Court to revisit rulings preventing collection of sales taxes from out-of-state online retailers. reports the Times-Free Press.

State Department of Revenue officials will hold a rulemaking hearing in August on a proposed rule that administration officials hope will tear down that barrier and let the tax dollars roll in.

The rule would require out-of-state online companies with more than $500,000 a year in Tennessee sales to collect and remit sales taxes to the state starting July 1, 2017.

Adopting the rule is a multistep process. If adopted, it’s virtually certain to be challenged in court. And that’s the primary objective of the strategy being pushed by states like Alabama, South Dakota and now Tennessee.

At least a dozen states are pushing a patchwork of laws or rules they hope will pressure Congress to act or, more likely, force the issue back before the Supreme Court.

“The governor has been out front on this issue and trying to get something through Congress,” Haslam press secretary Jennifer Donnals told the Times Free Press in an email.

If Tennessee is successful, Donnals added, “we would also look at reductions on the sales tax on food to be as cost neutral as possible.”

…Tennessee revenue officials estimate a loss of $300 million to $450 million in sales tax collections annually. The National Conference of State Legislatures estimates states collectively lost out on $23.3 billion in 2012.

“Tennessee is a sales tax-driven state, and we have to be fair to our local businesses,” state Revenue Commissioner Richard Roberts said by email.

Roberts called the status quo “fundamentally unfair” to local retailers. “Just this past year more Americans shopped online over the Thanksgiving-Black Friday weekend than went to stores,” he said.