Tag Archives: taxes. sales

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.

MS tax-free ‘Sportsman’s holiday’ being advertised in TN

JACKSON, Miss. (AP) — If you’re a sportsman, this weekend is your holiday.

Mississippi’s inaugural tax-free holiday will begin Friday. It runs through Sunday.

The Legislature passed a law creating an annual tax-free weekend in September. The law went into effect on July 1. The holiday will be held annually on the first Friday of each September until midnight on the following Sunday.

Individual sales of firearms, ammunition, archery equipment, rifle scopes and certain hunting supplies will be exempt from taxes during the state’s inaugural tax holiday. Mississippi has a 7 percent sales tax.

Louisiana’s sportsman tax-free holiday is also this weekend.

“We’re very excited about this weekend,” said Tom Oaks, owner of Lonnie’s Sporting Goods in Corinth. “It’s going to be a great thing for both our customers and us.”

While a large turn-out is projected for the weekend, Oaks believes it would have been even more popular had it not been for the exclusions.

“I do think it’ll be big, but it could have been even bigger. Louisiana is in their fourth year of doing this and everything is included. Sportswear, hunting boots and other types of gear are excluded from ours.

“While I am definitely looking forward to it, it is not what it should have been,” Oaks said.

Oaks said he has advertised in Tennessee in hopes that more shoppers will be enticed to visit Lonnie’s and take advantage of the special opportunity.

“I’m thinking it’s gonna be crazy; it’s gonna be like Christmas time,” said Corey Campbell, manager of Scruggs Sporting Goods in Tupelo.

“Expecting a lot more bigger crowds,” Campbell said. “In the last week or two people have been in shopping, seeing what we had.”

While firearms are always a popular sell, retailers say ammunition will be their most popular item.

“Ammunition is gonna be a big one,” Alabama resident Calvin Kluesner said. “I suspect the closer we get to hunting season it will be like it has been the last few years. We won’t have any ammunition; it will be brought out pretty quick.”

A tax free weekend could make ammo much more affordable even for out-of-state people like Kluesner.

“Ammunition, scents, anything with hunting you know things that hunters are gonna start looking for pretty quick,” Kluesner said. “With the hunter tax free weekend I couldn’t think of another opportunity for hunters to get out and get those items that they are gonna need for hunting season.”

Amazon sales down in states where taxes are collected

Amazon.com has seen its sales fall in state, including Tennessee, where it has begun collecting taxes on purchases, according to a study reported upon by the Chattanooga TFP.

Tennessee joined 19 other states this year in requiring Amazon to collect sales taxes on what it sells because the company operates distribution facilities in the state, including its giant warehouses in Chattanooga and Charleston, Tenn. Amazon will begin collecting sales taxes on items purchased by Florida residents on Thursday after the company expanded its facilities in the Sunshine State last year.

A new study suggests that requiring Amazon to collect the sales tax is likely to limit Amazon sales and push some buyers to other online merchants that don’t have a presence in Tennessee and aren’t required to collect sales taxes.

Researchers at Ohio State University looked at purchases by 245,000 people in five states that began permanent collection of taxes on Amazon purchases between 2012 and 2013 — California, New Jersey, Pennsylvania, Texas and Virginia. The study found that the sales tax reduced Amazon sales overall by 9.5 percent. For purchases of $300 or more, Amazon sales plunged by 23.8 percent after the company began collecting the tax.

“Households substitute Amazon with other retailers, either online retailers who are exempt from collecting the sales tax or in-state retailers (online and brick-and-mortar),” doctoral student Brian Baugh wrote in the 39-page study.

While Amazon sales dropped, big-ticket sales of other online merchants who still don’t have to collect sales taxes on their sales jumped by more than 60 percent. The study found that sales at local brick-and-mortar stores rose 6.5 percent on items valued at $300 or more.

Desha Grubb Maples said Tuesday she has quit buying from Amazon since the new tax began in January, in favor of other online merchants not required to collect the tax because they don’t operate in Tennessee.

Despite such losses, however, Amazon.com still grew its sales by 20 percent in the first quarter of 2014. How did the online retailer do it?
Well, not everything Amazon peddles on the Amazon Marketplace website is covered by the new “Amazon tax.” Amazon.com’s program permits third-party sellers to advertise their goods on its website — and even to outsource the billing, warehousing and delivery to Amazon.

But because the items are not technically sold by Amazon, such items are not subject to requiring buyers to pay sales tax at the time of the purchase. As a result, Amazon still doesn’t have to collect tax on much, if not most, of the sales it makes through its website.

TN Still Tops in Sales Tax

Tennessee shoppers continue to pay the highest average sales taxes in the nation, according to a report issued by the Tax Foundation. (The Chattanooga TFP has a writeup.)
The Washington-based, nonpartisan tax research organization said the statewide average state and local sales tax burden in Tennessee is 9.43 percent for every dollar spent on taxable items.
Tennessee is in a five-way tie with Indiana, Mississippi, New Jersey and Rhode Island for the highest state sales tax rate — 7 percent.
But local governments’ ability to add up to 2.75 percent catapults the Volunteer State into the No. 1 position in terms of state and local sales burden, the foundation analysis found.
….While Tennessee’s combined sales taxes rank No. 1, its overall average state and local tax burdens rank favorably, according to the Tax Foundation report.
Tennessee residents live in a state that has the 47th lowest overall state and local tax burden — 7.6 percent or the third lowest nationally — according to another Tax Foundation report.
Tennessee has no general personal income tax although it does have a 6 percent tax on certain interest and dividend income as well as a 6.5 corporate income tax.