As Amazon Heads to TN, Retailer Shuns Texas’ ‘Unfavorable Regulatory Climate’

Amazon is pulling out of Texas because of that state’s hard line on collecting sales tax from the Internet retail giant’s sales. Some of those Lone Star State workers could relocate to Tennessee, where the company has been received with open arms by the Haslam administration, which has taken a much softer line on online tax collections. Amazon is building two massive distribution centers in East Tennessee.

KPRC Channel 2 in Houston reports that Amazon is closing its Dallas-area distribution center and won’t expand in Texas after a dispute stemming from the Texas state comptroller’s demand the company fork over $269 million in uncollected taxes.

Dave Clark, Amazon’s vice president of operations, writes in the e-mail that the center will close April 12 due to Texas’ “unfavorable regulatory climate.” Amazon spokeswoman Mary Osako would not say Thursday how many employees work at the Irving distribution center.

…(A state official) said Texas loses an estimated $600 million in Internet sales taxes every year.

Amazon has been the target of numerous lawsuits filed by states seeking sales taxes on online purchases made from within their borders.

Clark also said in his e-mail that the company was “previously planning to build additional facilities and expand in Texas, bringing more than 1,000 new jobs and tens of millions of investment dollars to the state, and we regret the need to reverse course.” Texas employees who are willing to relocate will be offered positions in other states, Clark said.

Gov. Bill Haslam has said his priority is making sure Amazon comes to Tennessee, and has shied away from the tax issue, but both he and Republican Lt. Gov. Ron Ramsey told the Tennessee Press Association Thursday they are committed to maintaining and enhancing the state’s reputation of having one of the business-friendliest political climates in the United States.

“I’m a small-business man myself, and you know what I want out of state government? Absolutely nothing,” Ramsey said. “Leave me alone. Get out of the way, and I’ll create jobs. All I want for government is to get out of the way.”

Late last year, Haslam said the issue of untaxed online sales was something “to look at long term, but I do not think it needs to interfere with our recruiting of Amazon to Tennessee. That’s a huge priority for us,” according to the Chattanooga Times Free-Press. The Chattanooga-area centers will reportedly be up and running in time for the Christmas shopping season.