It’s a battle that’s playing out in state after state these days: Cash-strapped and budget-strained, what are your state lawmakers willing to do to goose tax revenues? And is that more important than, say, bringing in a few thousand new jobs?
Folks in Tennessee are about to find out, it appears:
USA Today: Tennessee Retailers Oppose Amazon Sales-Tax Pass
Amazon wants to build a pair of new distribution centers in Tennessee, which would create roughly 1,400 jobs for the Rocky Top state. What they don’t want to do is to have to collect sales tax on purchases from Tennessee customers, which the distribution centers (by virtue of creating an Amazon physical “nexus” in the state) would bring about.
Currently, the responsibility of paying Tennessee sales tax on Amazon.com purchases rests with the individual consumer. Just like all states with sales-tax mandates on the books, Tennessee has a counterpart “use tax” that’s required to be paid on all products purchased outside the state for use within the state.
(My home state of Oklahoma approaches sales and use taxes the same way. Yes, I track my use-tax payables in Quicken, and pay all my online-purchase use taxes as required by law, and I keep all receipts each year to prove the same. As far as online consumers go, though, I suspect I’m in the, uh, minority.)
The Bigger (Online) Picture
As I read the story above, it’s hard for me to think that we’re going to go much longer without some sort of sales-tax mandate applied to ALL online retailers (which, because I sell spreadsheets, includes me), even if it has to be done federally — think VAT.
Given the ever-increasing funding needs of government at all levels — ain’t debt-n-promises wonderful? — I just don’t see how this can be avoided. The online-purchase world currently figureheaded by Amazon is just too big of an untapped money bucket for any self-respecting politician to ignore.
Melissa wrote:
Thanks for the heads up. I live in Tennessee, and will be watching this one closely.
David C wrote:
Well, this battle is heating up down here in Texas. Amazon has announced they are going to close their distribution center in Irving, TX in order to dodge collecting sales taxes.
http://www.dallasnews.com/business/headlines/20110210-amazon.com-shutters-irving-office-after-tax-dispute.ece