Taxing questions; should Amazon jobs deal be a 'do-over'?
CLEVELAND, BRADLEY COUNTY, TN (WRCB) – In a matter of weeks, Amazon.com will open two 'fulfillment' centers in Hamilton and Bradley Counties adding hundreds of jobs.
It's renewing the fight over the T-words: Tennessee sales taxes.
Why Amazon doesn't have to collect them, why competitors claim it's not fair, and the push by some lawmakers to change that.
Governor Bill Haslam says he wants a deal but doesn't want to back out of the deal already cut either.
Brenda Howell concedes that some folks come into Lee's Used Books & Media just for the mascot, Leo the Parrot. But his isn't the only bird's eye view of what's available.
"I do sell on Amazon and I do very well by it," Howell says. "I don't know how we would have fared the past year without that business."
But Amazon.com is her competitor too.
"If they can get the same thing for the same price there and not have to pay sales taxes, it's really gonna hurt," Howell says.
That's why she's straddling the fence, over calls from some Tennessee lawmakers, to 'do over' the deal that prompted Amazon to build two giant 'fulfillment centers' or distribution hubs in Hamilton and Bradley counties.
A nationwide group of small business, The Alliance for Main Street Fairness, minces no words.
"They won't collect a dime to educate kids in California, or to keep the streets safe in Philadelphia," intones an Alliance commercial appearing on YouTube. "They (Amazon) won't collect sales taxes in four fifths of the country, hurt brick and mortar retailers and costing us jobs."
Bradley County Mayor D. Gary Davis doesn't see it that way.
"They've committed to spending millions of dollars in our community and bringing it hundreds of good paying jobs," he says.
Davis concedes that many of the specifics of Amazon's deals remain secret.
We do know that Amazon got free land, $12 million in property tax breaks, $7 million in "fast track" grants for site preparations and buildings, and Tennessee will cover the costs to train the hundreds of permanent and seasonal workers Amazon has pledged to hire.
"You may not like those terms, but changing them would send a bad message," Davis says. "It'd be don't go to Tennessee, they won't honor their commitments. It's gonna make attracting and retaining jobs that much tougher in the future."
The Chambers of Commerce were critical in negotiating the deals that landed Amazon. They're sitting out this battle, on grounds that any changes should be negotiated between lawmakers and Amazon itself.
Amazon spokespersons haven't returned email requests seeking comment but they have insisted that Amazon's fulfillment centers are 'drop-shippers' rather than retail stores.
As such, a 1992 Tennessee law exempts distributors from responsibility for collecting sales taxes.
Governor Bill Haslam has expressed hope that lawmakers will not force Amazon to collect taxes on the facilities set to open soon in Southeast Tennessee. He believes tax collections should be on the table should Amazon expand its operations.
The University of Tennessee's Center for Business and Economic Research estimates that failure to collect sales taxes from mail-order businesses and 'e-tailers' costs the Volunteer State $12 billion in revenue each year.
Fair or not, Brenda Howell believes a deal is a deal.
"I would not push it myself as a business owner," she says. "I would let it stand and hope that the powers that be know what they're doing."
Amazon has announced plans for another center near Nashville.
Governor Haslam has said any such expansion should include some way to collect Tennessee sales taxes.
It's not clear whether that might make Amazon pull out, or pull back: Amazon's spokespeople haven't responded to emails.
UT'S Center for Business and Economic research estimates failure to collect is costing Tennessee $12 billion sales tax dollars, a year.