published Thursday, June 30th, 2011

McCormick: Ruling won’t halt Amazon

Construction continues on the Amazon distribution center at Enterprise South.
Construction continues on the Amazon distribution center at Enterprise South.
Photo by Jake Daniels.
Opinion of Tennessee Attorney General Roy Cooper on taxation of Amazon
Opinion of Tennessee Attorney General Roy Cooper on taxation of Amazon

The Chattanoogan who speaks for state House Republicans said Wednesday that, despite an attorney general’s opinion, he’ll fight legislation to make Amazon collect Tennessee sales tax.

Majority Leader Gerald McCormick also said he doesn’t expect Attorney General Bob Cooper’s opinion to affect construction of distribution centers in Hamilton and Bradley counties.

In fact, Gov. Bill Haslam’s office is talking with Amazon officials about building three more facilities in Tennessee.

“We are working with Amazon to grow jobs in Tennessee through the current project and potential expansion plans,” Haslam’s press secretary, David Smith, said Wednesday.

The nation’s No. 1 Internet retailer is spending $139 million to build distribution centers in Hamilton and Bradley counties. It plans to create more than 1,400 full-time jobs and more than 2,000 seasonal slots.

Tuesday, Cooper issued a legal opinion saying proposed legislation that could force Amazon to collect taxes on Tennessee sales is constitutional.

Cooper’s opinion appeared to support the contention that building distribution centers in the state creates a physical presence, or “nexus.” Under U.S. Supreme Court rulings, states cannot compel out-of-state retailers to collect sales taxes from in-state customers unless they have a nexus.

Legal muster

McCormick said he assumed the opinion would back the constitutionality of the legislation, which was sought by the chairmen of the Senate and House Finance Committees, Sen. Randy McNally, R-Oak Ridge, and Rep. Charles Sargent, R-Franklin.

“They asked [for the opinion] because they couldn’t pass the bill anyway,” McCormick said, adding that he will do “everything to make sure” the bill doesn’t have the votes if it comes up again.

McNally said he would welcome Amazon jobs in Tennessee “but at what price to get those jobs?”

“Is that fair to existing businesses?” he asked in a telephone interview.

McNally said the bill was postponed until January, but he’s waiting to see what comes out of the state’s negotiations.

“I’ve got confidence that the current revenue commissioner and governor are able to negotiate with Amazon,” he said.

McNally said he believes the attorney general’s opinion “knocks the props out of the argument Amazon used before our committee.”

Poll
Should Amazon purchases be taxed?
  • Yes. 45%
  • No. 55%

200 total votes.

Amazon officials could not be reached for comment Wednesday.

The company maintains that its fulfillment centers, where orders are processed and merchandise shipped, are “separate and apart” from its retail business.

In May, Amazon said it is looking at building three more distribution centers in Nashville or Knoxville — or possibly splitting the centers between them.

According to a state filing, the Internet retailing giant could invest $180 million in those centers and employ about 1,700 full-time workers and 2,000 part-time or seasonal workers within two years.

Haslam has said he continues to back the Bredesen administration’s commitment to Amazon that the company will not be required to collect state sales taxes.

Legislative analysts have estimated that Tennessee government would reap an additional $7.9 million a year under the legislation while local governments would see about $2.7 million.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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nucanuck said...

To level the playing field, the Tennessee legislature should allow shipped goods from ALL retailers, in-state ot out, the same tax terms as Amazon.

June 30, 2011 at 12:20 a.m.
inquiringmind said...

Tennessee needs an income tax that also forces a drop in sales tax to 0%

June 30, 2011 at 7:21 a.m.
bpqd said...

We need to enforce our state's tax laws, and enforce this agreement which Amazon reneged on when they failed to treat our unemployed with respect. Tax them immediately.

All of these Republican crooks need to be removed from office immediately. We do not give six million dollars to people who lie to us. The tax break was for improving Owner's Equity, which Amazon did not. They have deliberately told us, directly, through their ads that they do not want to hire unemployed people.

They are not creating anything. This deal with Amazon is a fraud. Stop them by taxing them like everyone else.

Just because Scott Desjarlais got paid off with a million bucks doesn't mean that will happen to every Republican here. You backstabbers need to stop selling us out and start standing up for our people. That means enforcing the entire contract.

We need to get what we pay for. We are paying Amazon six million dollars to renege on their half of the agreement right now, and these fat freeloader tax evading Republicans are on board with it.

No wonder they pay each other $328,000 for websites. The graft and greed is out in the open. We are not here to be a cash register for rich boy crooks.

Throw Amazon out of our state and sue them for fraud now.

June 30, 2011 at 9:40 a.m.
MasterChefLen said...

bgqd you are idiot! You should go to California with the rest nutjobs. You are probably one of those idiot lazy union bums who pickets the job sites of people that will actually work for a realistic wage.

June 30, 2011 at 9:04 p.m.
bpqd said...

I am a food critic for an influential local website.

June 30, 2011 at 10:50 p.m.
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