The governor said Friday lawmakers should not force Amazon to collect Tennessee sales taxes without a prior agreement. He said his administration is negotiating with Amazon to expand its presence in the state and also collect sales taxes.
State Rep. Eric Watson said Saturday evening he is “very concerned” the governor might be changing his position on the agreement between the state and online retailer.
“It’s news to me,” Watson said of the negotiations. After learning of Haslam’s statements, the state representative called the governor’s office twice Friday for clarification.
“No one from the governor’s office has returned my calls,” Watson said.
Bradley County Mayor D. Gary Davis said he also was surprised and now worries about the outcome and consequences the discussions will have on the fulfillment center in the county.
“They’ve started building and spending millions of dollars in Hamilton and Bradley counties, and yet our state officials continue to talk about whether they should be taxed or not,” he said.
Collecting sales tax was not part of the original agreement with Amazon.
“My real concern is that it will be tougher and tougher to recruit new industry if we get this kind of an image,” Davis said.
Cleveland Mayor Tom Rowland said as much as he would like to see Amazon collect sales tax, he “ ... does not want the state to renege on the original agreement and lose jobs and property tax in addition to local sales tax collections from employee purchases.”
Former Gov. Phil Bredesen’s administration made the deal to let Amazon not collect sales taxes on items sold through fulfillment centers in southeastern Tennessee.
Until last week, Haslam publicly supported the agreement, but according to The Associated Press, the governor said, “I would love to have an approach where there was an agreement first where Amazon would say, ‘OK, we’d like to grow and expand in Tennessee, and we want to do it according to this agreement.’”
The deal has upset retailers who say it gives Amazon an unfair advantage. Some lawmakers have since called for reversing the arrangement. Haslam said he doesn’t want to renege on the existing agreement.
Virginia-based Alliance for MainStreet Fairness bills itself as an organization committed to educating private citizens, small businesses and elected officials about common-sense tax updates that could level playing fields for small businesses and online retailers.
The organization said Thursday in a press release, “We appreciate Gov. Haslam’s understanding that it is harmful to Tennessee and unfair to local businesses for one online-only retailer to get a special deal that exempts them from collecting sales taxes rightfully owed to the state. Tennessee retail businesses that collect sales taxes 365 days a year should not have to wait even one day longer to compete on a level playing field with Amazon.com.”
The release added, “Our coalition encourages Gov. Haslam to lead efforts here in Tennessee to ensure sales tax fairness and to work with Sens. Alexander and Corker to implement a national solution that ensures the government isn’t in the business of picking winners and losers.”
According to AP reports, the governor said he would not speculate on whether he would veto a unilateral bill on Amazon’s sales tax status until he could read specific legislation on the issue.
Amazon is building distribution centers in Hamilton and Bradley counties, and has recently announced plans for another facility in Lebanon, about 25 miles east of Nashville.
Watson said recently that the Wilson County fulfillment center is slightly less than half the size of either of the two 1 million-square-foot fulfillment centers in Cleveland and Chattanooga. All three centers are expected to open sometime in the fall. Total investment in Bradley County has been estimated at about $63 million.
Watson said the company projects 400 full-time employees and up to 800 temporary jobs in peak holiday seasons in Bradley County. Full-time employees will have medical and dental coverage. The company pays for vision, life insurance, disability insurance and vacations. Employees are offered annual stock grants and a 401(k) plan with a company match. Candidates for hourly positions can apply online at www.amazonapplyonline.com/tenn or call 866-885-6277 for more information. Candidates for management positions can apply online at www. amazon.com/careers.
