Sales tax demand could drive Amazon away

NASHVILLE — An official said Wednesday that legislative efforts to make the Internet retailer collect sales taxes on its Tennessee customers are unconstitutional and, if approved, could cause the company to abandon fulfillment centers it is building in Hamilton and Bradley counties.

“You need only look at South Carolina and Texas,” said Amazon’s vice president for public policy, Paul Misener, alluding to two states Amazon says it is leaving in response to similar situations.

“Here’s the thing: Sure, they can pass a bill and we can go and litigate it, and we’re confident that we can ultimately win,” Misener said.

“But why would we want to come to a state that made a commitment not to harass us in this way and then, once we get there, the very first thing we face is a lawsuit? It just doesn’t make any sense. Why not go to Indiana where we’re welcome?”

Read the full story at the Times Free Press.

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Comments » 9

burpee_von_rotweiler_IV writes:

I really want Amazon to come to Tennessee. However, I don't want them here if they will not play by the rules like other businesses. The state should not cower to the tacky, overt threats to leave like they did in South Carolina and Texas. If they don't want to be here, so be it.

Puffy writes:

I'm not sure I agree with the deal that was made; but it was made. There's a lot to be said for keeping your word once it's given.

xYvoyer writes:

in response to Puffy:

I'm not sure I agree with the deal that was made; but it was made. There's a lot to be said for keeping your word once it's given.

“There's a lot to be said for keeping your word once it's given.” / Government = Oxymoron.

whizkidtn writes:

in response to drichards1953:

(This comment was removed by the site staff.)

That was well expressed view and one that I would also have to agree with. +1

Tax reform is very much needed.

hallsguy writes:

Well said Dr..Couple of points.It is not against the law to to go to Kentucky to buy groceries and bring them back to Tennessee.It is not against the law to go to Viginia to buy cigarettes and bring them back here.If that were the case Bristol, Va/TN would have a big problem.
Tennessee ATF used to have a problem with people in Memphis going to Arkansas to buy alchohol. They would sit in parking lots of liquor stores and grocery and Walmart and look for Tn license plates and stop them on the bridge back to Memphis. Arkansas sued and won.

Amazon's operation is basically a warehouse and they ship to everywhere. To ask them to separate out the state and charge them tax is a bit onerous.Amazon is good for FedEx and UPS and there is a trickle down.lots of jobs.
I agree that once you give your word to do something then you should do it. Both sides.

tentwenty writes:

@drichards1953: great insight. I thought Tennessee was business friendly. Amazon's impact would be very positive for the state economy... the state is just getting greedy.

sec_fan writes:

As an Amazon customer I want them to have the exemption. They have to charge shipping and you have to wait, If a sales tax is added then it makes it harder for them to be competitive in the state. Out of state online retailers don't charge sales tax.
If they go we lose the sales tax and jobs, if they give them the exemption then at least we keep the jobs.

burpee_von_rotweiler_IV writes:

in response to drichards1953:

(This comment was removed by the site staff.)

Tennessee is full of "fulfillment centers" especially around the FedEx hub in Memphis. Tennesse residents pay sales tax on items purchased out of state but filled at an in-state fulfillment center. The other firms have figured out the local and state sales tax issues. Why can't Amazon? It is not right to give Amazon an unfair advantage over the other companies. Tennessee might win Amazon but lose out on countless others who would in the grand scheme of things employ more workers than Amazon would.

American Girl. No retail stores in Tennessee. HQ in Wisconsin. But an online or telephone purchaser from Tennessee would pay sales tax because their fulfillment center is in Memphis. There are countless other similar exampes. If a break is given to Amazon, then the same advantage should be given to the others.

JohnBravo writes:

The sales tax quagmire is a mess and the laws governing sales tax were mostly written long before anyone dreamed of this thing called the internet.

Tennessee, as well as other states, has a legitimate claim to sales tax revenue for sales consummated within the state. I don't know what the legislation's aim is but here's my take on things.

Tennessee residents, placing orders at should be subjected to Tennessee sales tax if maintains a physical presence within the state of Tennessee. Zip codes required for shipping the product would suffice for programming the code and calculating the tax. This is a very common practice and should NOT be exempted from it. It should not matter where the product ships from, though most likely, if is managed well, most shipments will come from TN if they are going to TN residence. most likely chose TN after a through review of TN law and case law in TN and determined that they would not be required to collect tax on anyone. Sounds to me like legalized tax evasion.

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