The Amazon Discussion

We've had a lot of great conversations with members and the public recently about the Amazon issue. Some of our members don't understand why we would fight the job creation - TFT wants new jobs for Tennesseans. But the jobs Amazon creates could provide an unintended consequence statewide when thousands more lose their jobs as a result of local employers closing their doors because they can't compete with Amazon's unfair tax advantage.
Others question why we would advocate for any kind of additional sales tax. The fact is that Internet sales are legally required to be taxed when the vendor has a physical presence in Tennessee. This applies fully to Amazon's distribution centers in Bradley County and Chattanooga and to the proposed fulfilment center they announced today they plan to build in Lebanon, TN.
Until we can reduce the general sales tax and eliminate the tax on food, legally obligated tax revenue must be collected to avoid further cuts in health care, public services, and education. Shoppers who buy on Amazon.com must have a credit card, a physical address, and access to a computer and the Internet - these tend to be shoppers who are not low-income. If these purchases (that are likely not basic necessities) are exempt from sales tax, that's one more disadvantage handed down to low-income shoppers in Tennessee.
It's not fair to our local businesses who must collect the sales tax. It's not fair to those impacted when jobs and services are cut and lost because of a lack of state revenue - revenue that Amazon sales taxes could more than cover for the state.
This article from TN Report says it all:
- Dr. William F. Fox, director of economics at the University of Tennessee’s Center for Business and Economic Research, joined North Carolina’s secretary of Revenue, David W. Hoyle, in a presentation, and the message they brought was that Amazon has managed to create an uneven playing field and that Internet sales in general are having a huge impact on state revenues.
- Fox said his center’s research estimates the total of e-commerce is about $4 trillion, with about $46 billion in taxes due across the nation. He said most states surveyed are going to lose about $200 million or more this year due to uncollected taxes on e-commerce.
- “As we move from people who buy on Main Street, and they move to buy from Amazon because of the tax subsidy that is implicit in the way we pay, we cost the economy four jobs,” he said.“This is not a little issue. It’s not a small concern,” Fox said. “They don’t need a subsidy to operate. E-commerce associated with business-to-consumer sales this last year grew 18 percent, while commerce on Main Street essentially grew zero percent.”