Amazon.com accounts for only 5 percent of e-commerce in the United States, but it is dominating discussion of sales tax issues in Tennessee, as Gov. Bill Haslam can attest.
Haslam was bombarded by questions from reporters about Amazon at at least three separate press availabilities Thursday — although there had been little new development in the Amazon issue.
And Haslam’s reply has not changed: The state will honor the commitment given Amazon by the Phil Bredesen administration, but negotiations are ongoing to nail down the state’s long-term plans with the online retailer, which currently does not collect sales taxes owed the state.
But after awhile, it got a bit comical Thursday.
After fielding numerous Amazon questions at an event in Sumner County, a television reporter at a second event down the road asked Haslam for the latest word on “Yahoo.”
“You mean Amazon,” Haslam interjected with a smile.
When a reporter in yet another session with Haslam asked about Amazon, the governor laughed, then gave another standard answer.
The impetus for the Amazon questions might have been a press conference held Thursday in Lebanon, where retailers complained about a perceived advantage for Amazon against brick-and-mortar stores. Or it might have been the media attention to Amazon the day before in Chattanooga, where Haslam spoke at a Chamber of Commerce meeting. The Chattanooga area has two Amazon distribution centers in the works.
After an economic development meeting at the Bluegrass Country Club on Thursday, most of the Capitol Hill press corps was there, and the questioning began:
Q: “I’m a little confused about the Amazon thing. Are you honoring the deal? Are you negotiating a different deal? What’s going on?”
Haslam: “First of all, we’ve been real clear. Of course we are honoring the deal. Second, I said way back in the legislative session that we would have ongoing discussions, we’d have further discussions. We’re doing that. There’s really nothing else to say beyond that.”
Q: “In terms of these further discussions, did the whole situation with what happened in South Carolina, where there was suddenly a four-year or five-year limit, did that put pressure on you all to take a look at this?”
Haslam: “I wouldn’t say it put pressure on us. I’d say Amazon is looking to grow. We welcome those jobs there in Hamilton and Bradley (counties). We’d love to see more jobs. Again, we’d like to come up with something that long-term works for them and us. And we think we can do that. We’re in the middle of discussions.”
Q: Right now in Lebanon, A.J. McCall and a bunch of people are having a press conference basically saying it’s not fair. You’re continuing to hear about this.”
Haslam: “Listen, if this was an easy situation, you know, it would be easy to solve. But the truth is there’s really good arguments on both sides. Retailers large and small are saying, ‘We’re collecting sales tax.’ By the way, everybody owes sales tax. Let’s be real clear on that. Everybody owes it. They’re saying, ‘We’re collecting it. Everybody should.’ That’s a fair argument. The deal was done by the state of Tennessee. They said if they built somewhere else, we still wouldn’t be collecting the sales tax. And that’s a good argument, too. We think we can work out a solution that works long-term for both.”
After a question about incentives on an Electrolux plant in Memphis, Haslam said deals should give a good return on investment for taxpayers, saying, “We’re not going to get out of the incentive business.”
Haslam was asked again about Amazon.
Q: “You had said you agreed with Bredesen.”
Haslam: “He called me in between election and going into office and said, ‘We’re getting ready to do this. They don’t want to do that unless they know you will honor what we did.’ I said, ‘We’ll do that.'”
Q: “How do you figure out what’s a good return on investment?”
Haslam: “It’s a combination of a couple of things. It’s the dollars they invest. It’s the number of jobs. It’s the average wage of those jobs. And then there are some other factors. Right now, rural areas are struggling. You might look at doing something if you have a rural county with 18 percent unemployment.”
Just minutes later, at another event, Haslam got the “Yahoo” question.
After correcting the questioner, Haslam: “We obviously are thrilled to have the jobs that Amazon brings to Tennessee. We’re in the middle of ongoing discussions with them to have a long-term solution we think works for everybody, and hopefully we’ll have more to say about that down the road.”
Q: “Do you think it will hurt the smaller businesses?”
Haslam: “Nothing has changed. Right now, if you’re buying from Amazon, or last year, or the year before that, you weren’t paying the sales tax. Nothing has changed on that. They’re building a distribution center, which some people think they have a physical presence in the state that should require them to collect sales tax that they didn’t collect before. So really nothing has changed. Before, they weren’t collecting sales tax, and they don’t now. We welcome the jobs and hope that down the road there’s a solution to this.”
Q: “Where does the deal stand now?”
Haslam: “We’re in the middle of discussions with them, and it’s too preliminary to say when those will be wrapped up.”
Later at that same event, Haslam was asked about Amazon.
Q: “On Amazon…”
Q: “If Governor Bredesen’s deal is final and you’re standing by that, then why is it you’re still talking with Amazon?”
Haslam: “No, what I said with Amazon is we’re going to honor the commitment that was made to them. They’re looking to grow. We’re looking to make certain we have an advantage that’s win-win for us long-term, and again, we’re having conversations that I think are in a good place now, but we’ll have to see how that works out.”
Q: “Do lawmakers have a role in this?”
Haslam: “I think the legislature has a role, for sure. I think one of the things we’re trying to do in our economic development deals is to make certain that everybody knows ‘Here’s what we did, and here’s why we did it.’ You can’t have a legislature out there negotiating deals. That doesn’t make sense to have 133 people, plus the governor, negotiating. I think it’s fair for them to look at deals and understand that and say, ‘That’s where we want the state to go.'”