New Amazon Deal Praised As Improvement On Deal, Not Backtracking

When all was said and done in the announcement Thursday that Amazon will collect sales taxes in Tennessee beginning in 2014, the state was in a different place from its original agreement with the online sales giant.

The original plan had been that Tennessee would get hundreds of jobs from two distribution centers in the Chattanooga area, so in return the state would let Amazon avoid collecting sales taxes on purchases. The deal was subject to debate almost from the time it became known.

Now, with a commitment that will bring the total number of Amazon jobs to 3,500 in the state, Amazon will have to collect sales taxes, although it is not soon enough for some critics of the deal.

So by negotiating a new deal with the company, taxes included, does that mean that in the big picture Tennessee went back on its word?

“No, absolutely not,” said Speaker of the House Beth Harwell, pointing to the efforts of Gov. Bill Haslam and Commissioner of Revenue Richard Roberts. “I’m proud the governor and the commissioner were able to sit down with Amazon and work out an arrangement that is pleasing not only to Amazon but also to the taxpayers of this state.

“I think it is a fair way to bring a large number of jobs to the state of Tennessee.”

Lt. Gov. Ron Ramsey, R-Blountville, called the announcement Thursday a “big win for unified Republican government on the jobs front.”

“The governor has negotiated a deal that promotes economic growth and jobs creation while protecting the interests of brick-and-mortar businesses who are the backbone of our economy,” Ramsey said in a formal statement.

“This is a good solution for the state of Tennessee, and I commend the governor for resolving this.”

Deputy Gov. Claude Ramsey said the deal simply means an improvement on what the state had before.

“It didn’t go back on its word. It just worked out a better deal,” Claude Ramsey said.

The deputy governor was asked if the new deal would in any way be detrimental to future negotiations with other companies.

“No, sir,” he said. “Because I think it shows that there is a solution. We worked to a solution.”

The original deal was struck by a Democratic governor, Phil Bredesen, who told Haslam of his plans and the reasons behind them: Get the jobs and collect no taxes, or lose the jobs and collect no taxes. Haslam, a Republican and newly elected when Bredesen told him of the deal, told Bredesen he would honor the agreement.

But ultimately, the Haslam administration engaged Amazon in an entirely new discussion. The result was an arrangement where Amazon not only would be collecting the sales tax but would be adding jobs to the point its total commitment had grown to 3,500 jobs and $350 million.

The entire scenario involved a Democratic administration sacrificing a substantial amount of revenue and a Republican administration doing everything it could to collect owed taxes — shifts from the stereotypical depictions of Democrats as tax-and-spenders and Republicans as advocates of revenue reduction.

Republicans did so in the name of tax fairness, yet other retailers were not satisfied that Amazon still gets until 2014 to start collecting and remitting.

In the Legislature, it was a Republican duo, Sen. Randy McNally of Oak Ridge and Rep. Charles Sargent of Franklin, who had contemplated legislation to force the tax collections.

Sen. Bo Watson, R-Hixson, speaker pro tem, said the new deal does not go against the original deal.

“I don’t think you can say it’s anything against the original agreement,” Watson said. “I think this is a continuation of dialogue that’s been going on between the administration and Amazon since the original agreement was discussed.

“All along, as this whole debate has been occurring, many of us, me being one, have been saying that conversations have been continuing, and this is just a continuation of that conversation.”

Democrats held a press conference Thursday, calling for $15 million toward a jobs plan. When they were asked about the Amazon deal, House Democratic Leader Craig Fitzhugh did what Haslam did and emphasized the part of the deal that was about jobs, not taxes.

“I think the primary focus is on the jobs, the jobs that the Bredesen administration brought here through Amazon, and through an agreement that has to do with the revenue, that there’s going to be another 2,000 jobs on top of that,” Fitzhugh said.

“So I think that’s the key thing we have to focus on in these times, which as everybody has said, is jobs.”

Mike Turner, the House Democratic Caucus chairman, said, “The law is already on the books. You’re supposed to be paying that tax as it is now.

“There’s no new taxes being added to the books because of what we’re doing.”

Andrea Zelinski contributed to this report.