Tuesday, October 4, 2011

Wal-Mart Claims New AG's Opinion Negates Amazon Deal

Posted By on Tue, Oct 4, 2011 at 1:48 PM

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Wal-Mart and the brick-and-mortar retailers doing battle with Amazon.com are ballyhooing a new state attorney general's opinion today. The Alliance for Main Street Fairness claims the opinion cancels the Bredesen administration's deal with Amazon. Under last year's arrangement, Amazon agreed to open distribution centers in Tennessee, and the state agreed not to force Amazon to collect sales taxes from its customers. The Alliance says the new opinion means Amazon will be forced to go to the legislature to win that sales tax exemption. In the legislature, Wal-Mart's lobbyists have drummed up a fair amount of opposition to giving Amazon a tax break.

"The AG opinion effectively reverses the situation in the legislature. The burden is on Amazon to have to pass a bill in order to have a sales tax exemption," former state deputy attorney general Bill Hubbard says in the Alliance's press release.

But the Alliance may be twisting the meaning of the opinion for its own purposes. (Wal-Mart wouldn't do that, would they?) The opinion says that "as a general rule" the Revenue Department can't cut a deal to waive sales taxes, but then adds:

Nonetheless the Commissioner of Revenue possesses substantial discretion in determining the best measures to take to enforce Tennessee’s tax laws. The exercise of such discretion is particularly appropriate where the enforcement of a tax may be debatable.

In this case, if you've been following closely at home, you know Amazon's obligation to collect the tax is very debatable and wrapped up in the whole question of nexus and physical presence and what that means.

We asked Gov. Bill Haslam about it all a few minutes ago after his luncheon speech to the Republican First Tuesday Club, and he didn't have much to say because he had only just heard about the AG's opinion. He's been trying to cut a new deal with Amazon under which the online giant presumably would agree to start collecting sales taxes after a certain period of time. In other states where Amazon has a physical presence, the company has made similar arrangements.

"I literally just heard that we got it so I haven’t seen the AG’s opinion so I don’t really have a whole lot to say new on that. We continue to have discussions with Amazon. Hopefully, we can come up with something that works for everybody sooner rather than later," Haslam said.

"That could be one of the outcomes that we’d have to have some legislation passed to set up whatever the new arrangement is."

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