published Tuesday, September 20th, 2011

Retailers lash out at tax deal

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    Construction continues on the Amazon distribution center at Enterprise South.
    Photo by Jake Daniels.
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NASHVILLE -- Sales by online retailers like Amazon will cost Tennessee as much as $3 billion in revenue and the loss of more than 10,000 jobs over the next five years, according to a new analysis released Monday.

Amazon is building two distribution centers in Southeast Tennessee, one in Hamilton County and one in Bradley County.

The study was commissioned by a national group of traditional brick-and-mortar retailers, ranging from small mom-and-pop stores to giant chains such as Wal-Mart.

"If the state is deprived of the $456 million-plus [annually] in sales tax revenues, there are fewer dollars to provide state services," said Sharon Younger, president of Younger Associates, which was hired by the Alliance for Main Street Fairness to analyze figures from a previous study by the University of Tennessee.

Younger told reporters at a news conference Monday that the figures take into account other jobs lost in the private sector and other tax revenue declines because those who lose jobs will spend less.

The Alliance's Tennessee spokesman, Mike Cohen, said the study underscores the need by Gov. Bill Haslam to revisit the sales tax collection exemption that his predecessor, Phil Bredesen, struck with Amazon to get the giant Internet retailer to locate the warehouses in Tennessee.

The agreement says the company can continue not collecting sales taxes despite having a physical presence in the state.

Tennessee retailers contend that online retailers such as Amazon enjoy an unfair advantage because they do not have to collect state and local sales taxes that range from 7 to 9.75 percent.

Cohen pointed to an agreement Amazon struck earlier this month with California, which says the retailer will begin collecting sales taxes within 12 months, and a similar agreement Amazon has with South Carolina to begin collecting sales taxes within 41/2 years.

While Alliance for Main Street Fairness "applauds" Haslam's efforts, he said, "We hope there's pressure on Gov. Haslam; we hope there's pressure on Amazon to do the right thing and they'll do in Tennessee what they've done in California.

"Do the right thing. Get on a level playing field. Nobody's afraid of competition. ... We just don't want government saying someone can have an advantage."

During the news conference, Nashville businessman Allen Doty, a partner at Cumberland Transit, a bicycle and outdoor recreation store, said he has some customers who visit the store, check out the products, then leave to purchase them online, where they do not have to pay sales taxes.

The Younger analysis does not take into account the $139 million Amazon is spending to build the two warehouses nor the 1,500 full-time employees and estimated 2,000 seasonal employees the company is expected to hire. The company also has plans to open a warehouse near Nashville.

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about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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GlacierClipper said...

This Amazon deal should have never been made. Other taxpayers will be the ones that suffers.

September 20, 2011 at 1:19 a.m.
harrystatel said...

[Mike Cohen] "Do the right thing. Get on a level playing field. Nobody's afraid of competition. ... We just don't want government saying someone can have an advantage."

This comment, coming from individuals, politicians, and Alliance members who have constantly sought government protection and government welfare for advantage and to eliminate competition, is hilarious.

I'm buying from Amazon and underground markets whenever possible.

September 20, 2011 at 6:39 a.m.
Astropig said...

These numbers being thrown out by WalMart are absurd. And yes, this is mainly an effort by WalMart to slow down Amazon,which is eating their lunch on price and most importantly,service. Amazon takes care of their customer while WalMart treats theirs like cattle.

But back to the numbers. Do any of you think that if this tax deal were repealed that WalMart or their "partners" would create 10,000 new jobs? Are you kidding ? They would raise their prices and cut positions to make Wall Street happy. That's a fact.

Finally, are you gullible enough to believe that WalMart really wants a "level playing field"? Visit your downtown area and tell me what WalMart has done to it. Ask the former business owners (who are now making greeters wages) how level the playing field was when Wally came to town and got government goodies to set up shop and run them out of business with cheap Chinese crap. Ask them. I'm sure that they don't feel like they are part of any "coalition".

Harry Statel up there has it right- Amazon and non traditional sellers all the way.

September 20, 2011 at 11:04 a.m.
tlogank said...

Here we go again. Why is the Times Free Press running almost the exact same story 2 days in a row with these BS stats? Look at the source...numbers can be skewed to make almost any point look swayed. Why do people neglect the fact that Amazon would leave if we enforced them to charge sales tax? Then we would STILL not be paying sales tax, and TN would lose jobs. It's amazing how trivial people are trying to make this when it's not really at all.

September 20, 2011 at 12:56 p.m.
prairiedog said...

What does this really mean to us here in Tennessee? Faster delivery from Amazon of the stuff we can go look at in our local retail stores. Frankly, Amazon, the internet and UPS beat the heck out of trying to find something in the Mall on the weekend anyway. We need to put more time and effort into manufacturing things in Tennessee that can sell to everybody else.

September 20, 2011 at 2:19 p.m.
harrystatel said...

Remember, the so-called "loss" is not to Tennessee; it's less money the Tennessee State legislators, governor, bureaucrats, and that ilk will have to waste.

And I'm all for taking money away from the "masters."

September 20, 2011 at 2:26 p.m.
sage1 said...

Walmart is the "devil" as they say today. Scum of the earth. They have spent YEARS running hudereds of thousands of smaller retail business OUT of business all over the USA and now they are crying about Amazon? HA HA HA! I love it...absolutely LOVE it!

I have not been in a Walmart in a very long time and make it a point to avoid the scumbags at all costs. I'd rather pay more for an item. Cry Wally World....Cry and Cry and Cry! You are making my day! Take your 99 cent shipping and your slave labor merchandise and stuff it!

September 20, 2011 at 3:14 p.m.
Meg said...

Can someone explain how this study was conducted? None of this makes sense to me. I, like most modern shoppers, shop online quite a bit. I use Amazon to compare prices & read reviews - which often leads me to make purchases locally – and ultimately to get the best deals. The location(s) of distribution centers will have ZERO impact on my shopping habits, and I can't imagine that it would affect anyone else's either.

I realize the state could collect sales tax from Amazon, but from what I have read, Amazon could also go somewhere else to setup shop if Tennessee legislators decided to try to force them to collect it. And how can you lose money you never had? Thousands of jobs will be created by the addition of these establishments. What jobs will be lost? Won’t the new income earned in the new jobs created by Amazon add fuel to our economy?

The internet is everywhere. Most of us use it as a means to purchase things we need. If online competitors hurt brick & mortar stores, perhaps the brick & mortar's should look into setting up their own websites. Oddly enough, is home to a great marketplace that would probably do the trick!

September 20, 2011 at 7:51 p.m.
MasterChefLen said...

As the saying goes, "There are lies, damn lies, and statistics." This analysis (paid for by brick and mortar retailers) is completely self serving and based in zero fact. I for one hate to pay sales tax as I consider it double taxation. Amazon brings good jobs, to Hell with the naysayers.

September 20, 2011 at 9:10 p.m.
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