Tag Archives: retailers

Bill Lets Cigarette Retailers Make More Profit By Raising Prices

Legislation allowing cigarette retailers to raise prices — by 32 cents per pack according to a legislative staff estimate — has cleared its first committee.
The bill by Rep. Matthew Hill, R-Jonesborough, deals with a current state law setting a minimum price for cigarettes. Hill told colleagues that has led to “large out-of-state cigarette manufacturers” requiring by contract that their products be sold at that price, costing retailers “hundreds of thousands if not millions of potential revenue” that could be realized by raising prices.
The Fiscal Review Committee staff calculated that the average price of a pack of cigarettes is currently about $5 in Tennessee and that the bill, if enacted, would let retailers charge an extra 32 cents per pack. It is further calculated that the higher price will drive down consumption so that the state loses about $1.4 million in annual revenue that it would otherwise receive from sales and tobacco taxes.
Because of complicated tax provisions interacting with the law on “state-shared revenue,” however, the Fiscal Review staff figures that local governments will actually receive more money if the law is changed to raise prices, even if cigarette sales drop as predicted.
Current law says retailers can sell cigarettes at no more than 8 percent above the price they pay to get them. The bill (HB644) would raise the ceiling to 15 percent above their cost. It is being pushed by lobbyists for convenience stores.
It was approved by the House Agriculture Committee last week and faces its first Senate committee vote this week.

Tennesseans Lobby for Internet Sales Tax Collection

Tennessee retailers joined in a Washington lobbying excursion Wednesday to promote legislation mandating that Internet retailers collect state and local sales taxes. Several Tennessee newspapers have stories on the expedition today.
From the News-Sentinel: Morgan Hardy watched in frustration as a man walked into his comics and games shop last week, picked out what he wanted to buy, and then used his cell phone to order the merchandise on eBay. By ordering online, the customer was able to avoid paying the 9.25 percent sales tax he would have been charged if he’d bought the goods in Hardy’s store.
“Customers are getting more brazen,” said Hardy, who owns Organized Play in Knoxville’s Old City. “They have to. It’s tough times for everybody.”
Hardy and other small retailers from across the country lobbied Congress on Wednesday to fix what they say is a loophole that gives large online companies a significant price advantage over smaller mom-and-pop businesses. Remote sellers, such as online retailers, are not required under federal law to collect and remit sales taxes on goods sold in a particular state unless they have a physical presence, or nexus, within that state.
From The Tennessean:
Lebanon business owner A.J. McCall traveled to Washington Wednesday to promote a bill that would let states collect sales tax on items sold online.
…”Every year a greater percentage of our business goes to the Internet,” McCall said. “If you can go on one person’s website and buy something without having to pay tax, and then you go (to my store) and you have to pay tax, it’s really a fairness issue.”
McCall is seen as an unlikely spokesman for sales-tax fairness because his company, D.T. McCall & Sons, has been under investigation since last year on allegations it had underreported cash purchases to avoid sales tax.
Tennessee Bureau of Investigation spokeswoman Kristin Helm said Wednesday the case will soon be closed “with no criminal prosecution” at the request of Wilson County District Attorney Tommy Thompson, who took over the probe.

Corker Sees Years Passing Before Congress Act on Online Sales Tax

CARTHAGE, Tenn. (AP) — Republican U.S. Sen. Bob Corker says it may be three or four years before Congress passes regulations on tax collections by online retailers like Amazon.com.
Corker told reporters after a speech to the Smith County Chamber of Commerce in Carthage on Tuesday that he considers it “unfair” for consumers to try out items at local stores only to later purchase them tax free on the Internet.
Gov. Bill Haslam has said he wants to take a lead creating national guidelines on Internet sales taxes, but Corker said he had not yet spoken with his fellow Republican about those aims.
Corker said that the two were scheduled to dine together later Tuesday and would likely discuss it then.
Amazon is building three distribution centers in the state.
UPDATE: Andy Sher has more. An excerpt:
Corker said he can’t say if he will support legislation sponsored by Sen. Dick Durbin, D-Ill., that would let states compel Internet retailers to collect sales taxes when they do not have a physical presence in a state.
“I don’t know,” Corker said. “I don’t know what the details of it are. I know that it [legislation] is actually changing right now.”
Tennessee Gov. Bill Haslam is grappling with a sales-tax collection controversy involving the state’s recruitment of Amazon to build distribution centers in Hamilton and Bradley counties.
The governor has said he is “more than willing” to take a national role in pushing Congress to act, but it appears Haslam has got his work cut out for him with just his home-state delegation.
Corker said that, while he
has talked with Haslam some about the issue, “he has not mentioned that he may be taking a leadership [role], but we both have a lot going on.”