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Jan 26, 2012, 2:49pm CST

Haslam: Sales taxes 'too big' to ignore national fix

Senior Staff Reporter- Nashville Business Journal

Gov. Bill Haslam touted the merits of national online sales tax legislation today in a call with Tennessee businesses hoping to alter what they consider an unfair playing field.

The Republican governor said he supported their efforts to give states the option to require online retailers to collect sales taxes. In Tennessee's case, receiving the tax — which online shoppers theoretically owe but don't report — could mean between $200 million and $300 million in additional revenue annually, Haslam said.

He also gave a nod to the brick-and-mortar retailers' contention that it's not fair they collect and pay sales tax when online competitors don't.

"It's just too big of a piece of our economy now to treat like we did 20 years ago," Haslam said.

He's referring to national law that doesn't currently require retailers to collect sales taxes, leaving it up to customers to report to the government. U.S. Sen. Lamar Alexander, R-Tenn., was also on the call, and, as the Nashville Business Journal first reported, is sponsoring legislation to create a framework for all states to require collection if they so wish.

Haslam wrestled with the issue while negotiating over whether online retail giant would collect sales taxes after bringing distribution centers to the state. While known to be supportive of Alexander’s legislation — as is Amazon — Haslam has been relatively quiet on the matter of late.

Opponents of Alexander's legislation say it will burden small online retailers in tough economic times. There's also the risk that the public will perceive the legislation as a new tax, a concern that has likely dampened Republican support so far.

Alexander says the current system serves as an improper subsidy of some businesses, and notes he's not creating a new tax — just calling for the collection of an existing one.

Brian Reisinger covers banking/finance, state government and manufacturing. You can follow him on Twitter at @BrianJReisinger.


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