Tag Archives: McNally

Amazon Cutting a Deal With California; Why Not Tennessee?

State Sen. Randy McNally says Amazon should offer the same deal to Tennessee that it has tentatively cut with California, reports Action Andy Sher. Under the California arrangement, Amazon would start collecting state sales taxes in September, 2012.
“I think Amazon would want to try to treat states the same as far as collection of the sales tax,” said Tennessee Senate Finance Committee Chairman McNally, R-Oak Ridge.
California lawmakers struck a tentative deal Thursday with the Internet giant, which has been battling in a number of states over collecting sales taxes on items sold to in-state customers. If Amazon is unable to get Congress to change federal tax policy by next June, the company would have to start collecting California taxes in September 2012, The New York Times reported.
The deal could fall apart, the newspaper said. Tennessee Gov. Bill Haslam has been seeking to persuade Amazon to begin collecting sales taxes after his predecessor, Phil Bredesen, struck a deal saying it would not have to in exchange for locating two multimillion dollar distribution warehouses in Chattanooga and nearby Bradley

Legislators Laud an Accurate Estimate

News release from Senate Republican Caucus:
(NASHVILLE, TN), August 18, 2011 — The Chairmen of the Senate and House Finance Committees, Lt. Governor Ron Ramsey (R-Blountville) and House Speaker Beth Harwell (R-Nashville) today congratulated the state’s Funding Board for their accuracy in estimating Tennessee’s incoming revenue for fiscal year 2010-11. Chairman Randy McNally (R-Oak Ridge) and Chairman Charles Sargent (R-Franklin) said the Funding Board revised the final estimates earlier in the budget year than usual and were only .032 percent from the actual collections.
“We congratulate the Funding Board for hitting these numbers right on target,” said Senator McNally. “We asked them to bring us their estimates before the April collections were received so the General Assembly could finish on time this year, and they did so with extreme accuracy.”
The Tennessee State Funding Board was created by law and is comprised of Governor Bill Haslam, Comptroller Justin Wilson, Secretary of State Tre Hargett, Treasurer David Lillard and Commissioner of Finance Mark Emkes. The Board considers economic projections from the state’s top economists near the end of the legislative session before forecasting both how much Tennessee will need to close out the current fiscal year, and what to expect as far as estimates for the next budget year.
The Board projected $8.5 billion in revenues in forecasting the close of the 2010-11 budget year and were within $27.6 million of that estimate.
“The year end variance reflects barely a day’s worth of revenue,” added Sargent. “The state has benefited greatly from the Funding Board’s cautious approach in what is a very fragile economy.”
“Unlike Washington, Tennessee must balance its budget, requiring absolute accuracy in our accounting. The Funding Board predicted our fiscal future with unprecedented precision,” said Lt. Gov. Ramsey. “The quality of their work allowed the Republican majority to keep our commitment to be efficient stewards of taxpayer dollars.”
Speaker Harwell concluded, “I am very proud of the efforts of the Funding Board and their work with Chairman Sargent. In these difficult economic times, our numbers have to be on target so we can craft a responsible, balanced budget. In doing so, we have painted a sharp contrast with Washington and provided taxpayers with a clear model of what fiscally-conservative, pro-growth leadership looks like.”

McNally, Sargent Question Legality of Amazon Tax Exemption

While Gov. Bill Haslam says he does not want to force Amazon.com to collect Tennessee sales taxes without the Internet giant’s agreement, two key state legislators are asking the attorney general to declare that present state law blocks the governor’s wishes.
In a letter to Attorney General Bob Cooper, the chairmen of the House and Senate Finance Committees declare that current state tax statutes “appear to be clear and unambiguous” in requiring retailers based outside the state to collect taxes on sales to Tennessee consumers under circumstances facing Amazon.
Sen. Randy McNally, R-Oak Ridge, and Rep. Charles Sargent, R-Franklin, ask in the letter that Cooper issue a formal legal opinion stating that their belief is correct.
Further, the Finance Committee chairmen ask Cooper whether state officials “by contract or letter ruling can waive the obligation of an out-of-state retailer to collect sales tax.”
McNally and Sargent are sponsors of a bill that would mandate Amazon collect sales taxes. They earlier obtained an attorney general’s opinion stating that enactment of such legislation would be constitutionally valid.
The new request goes beyond the original to seek a declaration that no new legislation is needed and that, in effect, any deal exempting Amazon from tax collections would be invalid.

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McNally on Impact of Federal Impasse in TN

News release from Senate Republican Caucus:
(NASHVILLE, TN), July 29, 2011 — State Senate Finance Chairman Randy McNally (R-Oak Ridge) said on Friday that it is crucial for the White House to work with Congress to settle their dispute over the federal debt ceiling. McNally made his comments after being briefed by financial experts this week regarding the impact of an impasse on Tennessee.
Congress and the White House have only four days to reach a deal that would prevent the country from defaulting on its debts for the first time in history. McNally said the state’s financial leaders are being consulted due to the broader financial implications to Tennessee if a federal solution is not reached.
“States need stability through development of a long-term budget plan that addresses the federal structural deficit,” said Chairman McNally. “We also need urgent action as there are many programs that would be impacted in Tennessee by an impasse. If a solution is not found, states will need to act quickly and decisively to keep services running; prioritizing help for our most vulnerable citizens whose services are dependent upon receipt of federal funds.”
McNally said state leaders are developing contingency plans in the case of a potential shut-down, depending upon what transpires at the federal level. While McNally applauds the efforts to cut spending, he hopes that Washington will not cut funding to entitlement programs and pass the costs to states without the flexibility to reduce services or enrollees.
Forty-four percent of the state’s budget is federal funding, which amounts to $14 billion of Tennessee’s $30.8 billion budget. Approximately 92 percent of federal funding is contained in only seven departments, with the majority going to TennCare at 44 percent, Human Services at 19.6 percent and Education at 14 percent. A shut-down could jeopardize state-administered federal programs that would be hard to discontinue immediately like individuals being served in Intellectual Disability group homes, children in state custody served by Department of Children Services, persons being served in state Mental Health Institutions, those being served by TennCare, and citizens receiving unemployment insurance payments.
“If the state elects to continue any of the above services, then concerns shift to the state’s ability to fund them with existing cash flow and reserves,” added McNally. “Our reserves will be critical to help us through such a crisis should it occur.”
McNally said that if a solution is not reached, there could also be a significant contraction of consumer spending leading to a decline in sales tax revenue. Tennessee was one of five states put on notice by Moody’s last week that the state’s credit ratings may be downgraded if a solution is not reached. If a long-term plan is not adopted, financial experts anticipate a subsequent federal credit downgrading will occur and trigger a downgrading in several states, including Tennessee.
“A federal shutdown would be harmful to Tennessee’s fiscal strength and make commercial paper more expensive,” McNally continued. “That could impact our cash flow. In addition, an impasse could have an effect on our Tennessee Consolidated Retirement System with the potential to lose value. The next several days of negotiations in Washington will be very important to Tennessee’s financial future.”

Because of Amazon Bill, McCormick Won’t ‘Stick My Neck Out’ for McNally, Sargent

House Majority Leader Gerald McCormick said Tuesday that he “really stuck my neck out” to defend jobs in the Oak Ridge area in the past, but does not plan to do so in the future because Sen. Randy McNally is pushing a bill that would hurt Amazon.com.
McCormick, elaborating on comments initially made to the Chattanooga Times-Free Press, said he thought a project dealing with low-level nuclear waste was unfairly attacked two years ago though a Democrat-sponsored bill banning such waste in Tennessee.
“It was an easy political target, but I stepped up, went out of my way and defended the whole thing,” he said in an impromptu interview with reporters. “I feel like I’m being repaid by him trying to run jobs out of my district.”
Amazon is building to distribution centers in Southeast Tennessee, one of them in Chattanooga Republican McCormick’s district.
McNally and Rep. Charles Sargent, R-Franklin, are sponsoring legislation that would force Amazon to collect sales tax from its Tennessee customers once the facilities are open. Amazon is adamantly opposed to the bill and its officials have threatened to abandon the Tennessee facilities if the legislation becomes law.
McCormick said he was not intending to be hostile toward economic development projects in the districts of McNally and Sargent, but would just stand back now.
“I’ve helped them before. I’m not going to do that in the future,” he said. “If I have to spend all my time defending my district, I don’t have time for helping other districts.”
McNally said the nuclear waste facility that McCormick mentioned is actually in the district of Sen. Ken Yager, R-Harriman, who represents Roane County.
“If he helped us, I would hope he helped us for the right reasons,” said McNally. “I believe he does things for the right reason… I’m sure that, if we have other issues come up, he’ll evaluate them on the merits, not on who the sponsor is.”
McNally said he believes that it would set “a bad precedent” for the state not to require Amazon to collect taxes when it locates in the state. The same is true for secrecy surrounding an agreement apparently made by former Gov. Phil Bredesen – and endorsed by Gov. Bill Haslam – to exempt Amazon from the need to collect state taxes.
“(The legislation) is not meant to hurt him or anybody in his district,” said McNally, chairman of the Senate Finance Committee. “It’s just a bad precedent for the state to be getting into.”

Haslam Doesn’t Like Idea of Two-Year Compromise on Amazon

Senate Finance Committee Chairman Randy McNally, sponsor of a bill that would require Amazon.com to collect sales taxes from Tennessee residents after it opens distribution facilities in the state, has suggested a compromise of sorts.
“I’d like to see what the administration is able to negotiate,” McNally said Tuesday. “Given what’s happened, if they allowed them to be exempt from collecting the sales tax for a couple of years, I think some type of arrangement like that would be in the best interest of the state.”
Gov. Bill Haslam, asked at a news conference today whether such a temporary solution would leave Amazon ‘in limbo,” replied, “I think it does.”
The governor said he is continuing discussions with Amazon to “define exactly” the taxing relationship between the state and the company, which plans to open two facilities in Southeast Tennessee later this year and has talked about further investments in the Knoxville and Nashville areas.
After that happens, he said the Legislature can make its decision on whether to proceed with the bill. The legislation is strongly opposed by Southeast Tennessee legislators; a coalition of in-state businesses that now collect taxes is lobbying in support of the bill.
Haslam, who opposes the bill mandating that Amazon collect sales taxes, said he is at the same time very much in favor of federal legislation to require all Internet sales to pay state and local taxes.
“Something has to happen nationally,” he said, adding that he anticipates taking a leadership role through the National Governors Association and otherwise to promote change at the federal level.
Bills to allow states to require Internet sellers to collect sales tax have repeatedly failed in Congress. There’s one pending now.

Legislators Question Bredesen-Amazon Deal on Taxes

Amazon spokesmen told legislators Tuesday that Tennessee is barred from forcing the Internet retailer to collect sales taxes by both legal precedent and a deal company executives made with former Gov. Phil Bredesen.
Some members of the Senate Finance Committee voiced skepticism about the legal precedent argument and asked for details about the agreement with Bredesen, which Gov Bill Haslam has declared an intention to honor.
Several officials from companies that operate retail outlets in Tennessee testified that Amazon will get an unfair competitive advantage if it does not have to collect sales taxes as they do. State and local sales can total up to 9.75 percent in Tennessee.
Flossie McNabb, co-owner of a book store planned for opening in downtown Knoxville soon, said an exemption from tax collections for Amazon would be “an added blow in trying to compete and survive.”
Braden Cox, director of state policy for Amazon, and John Lyell, a lobbyist retained by the company, said they were not personally involved in dealings with Bredesen and his administration and could not provide details of the arrangement.
Under questioning from Senate Finance Committee Chairman Randy McNally, R-Oak Ridge, sponsor of a bill that would force Amazon to collect sales taxes, Cox said “there were commitments made” by the Bredesen administration.
“I guess I just don’t know the legal nature of them… whether they’re actually something that can be upheld in state court,” Cox said. “I do know they were made in a business context, an inducement for us to want to come to Tennessee.”
Asked by Sen. Brian Kelsey, R-Germantown, if it was “more of a handshake deal,” Cox replied, “to the extent that a handshake deal matters – and I think they should – yes.”

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McNally Calls for Discipline of Student Protesters

A state senator today said in a brief Senate floor speech that the University of Memphis should “take action” against student protesters who disrupted and were dragged out of a Senate committee hearing Tuesday.
More from Richard Locker:
Seven people who shouted and chanted in protest of several bills aimed at curtailing collective bargaining and labor unions, refused to leave the hearing room, locked arms and dropped to the floor. They were later forcibly removed by state troopers and charged with resisting arrest and disorderly conduct.
Six of seven are from Memphis and were identified by protest organizers as members of the U of M Progressive Student Alliance. University officials have not immediately responded to requests for details but the student newspaper, The Daily Helmsman, reported that two of those arrested are currently U of M students and two others are Memphis College of Art students.
Sen. Randy McNally, R-Oak Ridge, a U of M graduate, rose on the Senate floor near the conclusion of today’s session and commended his colleague, Commerce Committee Chairman Jack Johnson, R-Franklin, and law enforcement officers for their handling of the protest.
“I’ve been down here a long period of time and have never seen a situation like that,” McNally said. “Now we did have people banging on the Senate door at one time and we did have individuals that threw bottles and rocks at a bus that was carrying some senators to the opening of an auto plant, but never a disruption like this.
“I was also dismayed to learn that six of the individuals were members of a registered student organization at the University of Memphis. It’s the Progressive Student Alliance, and I would hope the university takes action. I know that if it was a fraternity that did something like that, they’d be off campus in a heartbeat,” McNally said.
Asked by reporters later whether he believed students should be expelled from the school, he said, “I know if I did something like that I’d be long gone, when I was there.”