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VOL. 35 | NO. 19 | Friday, May 13, 2011




Lawmaker drops Amazon.com sales tax bill

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NASHVILLE (AP) — Tennessee lawmakers on Wednesday backed off trying to force Amazon.com to collect sales taxes on transactions in the state, at least for this year.

The House Finance Subcommittee vote Wednesday keeps on track the online company's plans to open distribution centers and create more than 1,400 full-time jobs in southeastern Tennessee. The Senate Finance Committee later followed suit and delayed its version of the bill next year.

Republican House Finance Chairman Charles Sargent of Franklin agreed to delay the measure, which Amazon.com opposed. The company says former Gov. Phil Bredesen's administration agreed to exempt Amazon from collecting the tax.

Rep. Kevin Brooks of Cleveland said in a statement after the vote that the action "demonstrates Tennessee's integrity."

"We gave our word and we are keeping our word," Brooks said.

Supporters of the legislation included a coalition of retailers already gathering taxes in the state, including Wal-Mart.

Amazon Vice President of North America Operations Dave Clark said in a statement that the Seattle-based company was "grateful to the Tennessee government for recognizing the jobs and investment Amazon will bring to the state."

The U.S. Supreme Court has ruled that states can't force out-of-state retailers to collect sales taxes from in-state customers unless they have physical presence such as a store.

With Amazon.com having pulled out of Texas and its South Carolina plans uncertain with state representatives Wednesday reversing an earlier tax dispute vote unfavorable to the company, other Tennessee lawmakers trying to protect the prospective jobs for their constituents praised Sargent's move.

"This is a 50-state problem; it's not just a Tennessee problem or a Washington problem or anything else," McCormick said. "It will have to be addressed nationally as we go more toward online purchasing."

McCormick said to have acted otherwise after making a commitment to the company would likely have other states "gleefully pointing out that we don't keep our deals and that you shouldn't go to Tennessee.

"I would hope that we spend our time creating jobs instead of discouraging companies from investing in Tennessee."

The company has proposed also building more distribution centers in Nashville or Knoxville.

Amazon.com in an April 29 state filing said it would invest $180 million and hire about 1,700 full-time and 2,000 part-time or seasonal workers within two years if it goes ahead with the plan. That would more than double the company's $139 million investment in the Hamilton and Bradley county distribution centers.

Clark said that "with the potential for nearly 3,000 full-time jobs with benefits, another 4,000 seasonal jobs, and nearly $300 million investment coming to Tennessee, this will be a partnership we intend on growing for many years."

Clark said the company already has more than 4,700 applicants from around the state.

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