Thursday, October 6, 2011

Report: Haslam Cuts New Deal with Amazon

Posted By on Thu, Oct 6, 2011 at 8:51 AM

amazon_image.jpg
Gov. Bill Haslam is holding a news conference this morning "to to make a significant jobs announcement." That's all his office will say about it. But the Nashville Business Journal is reporting "sources knowledgeable of the situation" say the governor has cut a new deal with Amazon.com.

The Journal isn't sure what the deal is but speculates reasonably that it "would allow Amazon to avoid collecting sales taxes for a limited time — perhaps two years, in a deal similar to other states — while pushing for the federal government to pass nationwide legislation."

The latest news on the Amazon front was a new state attorney general's opinion this week that Wal-Mart and other brick-and-mortar retailers really loved. Stretching the opinion's meaning quite a bit, their Alliance for Main Street Fairness claimed it 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 said the new opinion means Amazon will be forced to go to the legislature to win that sales tax exemption. The opinion didn't go that far, but did raise questions about whether the state Revenue Department could act unilaterally to give Amazon a tax break.

The Haslam administration has been negotiating with Amazon on a new tax deal since some Republican lawmakers—including Senate Finance Committee chair Randy McNally—started raising objections to the first one as unfair to Wal-Mart, AutoZone and other big businesses that hire high-priced lobbyists.

Update: Andy Sher reports Amazon would begin collecting sales taxes after two years under the new agreement.

Update II: After all the leaks to the media, about the only news from the just-completed announcement is that Amazon has agreed to create even more jobs in Tennessee. Now, the company says it will invest $350 million and hire 3,500 full-time workers—thousands more at Christmas. That's 1,500 more full-time jobs than previously announced. Amazon now says it will open five distribution centers in the state—two near Chattanooga, one in Lebanon and two more at as-yet undetermined places. Middle Tennessee cities are negotiating with Amazon to land the two additional warehouses. That's the mysterious Project Tango that everybody's been buzzing about.

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