Amazon’s Tax Treatment Draws Barbs from Women’s Business Group

Advocates for small retail businesses say instead of focusing on big splashy job creation announcements, Tennessee policymakers should wake up to potential job losses resulting from those splashes.

As Tennessee launched its latest back-to-school sales tax holiday for the weekend, the president of a national nonpartisan group supporting women-owned businesses and a Tennessee small business owner held a teleconference Friday trying to draw attention to the adverse impact of e-commerce on the state.

Barbara Kasoff, president of Women Impacting Public Policy, and Maggie Jetter, owner of the Tweed Baby Outfitters store in Nashville, made their pitch for economic fairness and fielded questions from reporters Friday about the sales tax holiday. The looming figure in the discussion was Amazon.com.

Amazon has become a white knight in the eyes of people trying to create lots of jobs in a short amount of time, with the online retail giant recently launching three large distribution centers in the state, and the possibility of even more. But at least some small businesses don’t see Amazon that way.

“I know they’re speaking about creating 1,500 new jobs, but you also have to keep in mind that with Amazon bringing a large company to Tennessee that’s not paying sales tax, you’re definitely coming close to putting out a lot of small businesses and losing even more than 1,500 jobs,” Jetter said.

Jetter and Kasoff offered no numbers in Friday’s conference call to back up the claim that job losses match the job gains, but Kasoff said small businesses create 93 percent of all new jobs.

“If small business retailers such as Maggie are not able to add jobs, that’s going to have a far-reaching and very significant impact on the economy,” Kasoff said.

Small retail advocates say it’s not simply that the brick-and-mortar stores are losing business to big online retailers but that losses in small businesses can hurt an entire community. When online retailers are exempt from collecting sales taxes, it puts a dent in the revenue streams for small governments and by extension, the services they provide.

Jetter said she can literally see the impact of online retailers on her store, which carries apparel for children, diaper bags and other baby products. She sees people come in so they can look, touch and feel the merchandise, then exit to go buy it online with no sales tax.

“I see it especially with this generation of parents,” she said. “A lot of the grandparents do shop here, but a lot of parents have all the online blogs and websites to find their deals, to register on Amazon, to get their diaper bags on there, which are one of our higher-priced items, which helps us pay the rent.”

Jetter said she is aware of Tennessee Gov. Bill Haslam’s offer to lead the call for national action urging Congress to level the playing field for states. But Kasoff was asked if it’s realistic to believe Congress would act to force handing over more taxes.

“Now that the (debt-reduction) votes of the past week are behind us, we hope that focus is going to be on building economic stability,” Kasoff said. “I think they’re going to take a hard look at this. I think the state legislatures across the country are going to be taking a hard look.

“We have to stabilize the economy. We have to bring some sense of stability and confidence back to consumers.”

Kasoff said sales tax holidays are an example of putting small retailers on a level playing field. While there is constant debate as to whether people are boosting business or simply shifting the timing of their purchases, Jetter said she definitely expected to see more business because of the brief sales tax break.

“This is just our second year as a brick-and-mortar store, but I do expect to see a lot of families here,” Jetter said. “I expect to see a good 10 to 20 percent more shopping because of tax-free items.”

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  • CommonSense

    Thanks for your continued coverage of this important legislative issue. It’s important for existing small businesses that Amazon collect the same taxes they’re required to.

  • Brad

    I’m glad that small businesses are taking action against Amazon! Most people do not realize how much this national retailer tax exemption is going to cost our state! It is going to hurt small businesses and will show that we are playing favoritism in the State House. Free markets create opportunities for everyone. Don’t allow a multi-billion dollar corporation gain competitive advantage over our local businesses. Our local businesses are the ones giving back to our state!

  • Wallace

    Brad, completely agree with you, in this kind of economy, we don’t need to be giving multi-billion dollar companies multi-million dollar tax breaks. Why can’t these breaks be focused towards growing small businesses that create many more jobs than Amazon will.

  • Rebecca87

    I know that this begins at the state level, but I do think it needs to be addressed at the federal. If you force Amazon to collect sales taxes in one or two states, it really only affects the people in that state. Those living there will most likely choose to go back to small businesses or everyone’s favorite mega chains (or pay the sales tax on an Amazon purchase and at least benefit the local community). What really needs to happen is that the federal government or courts or whatever need to decide which way this goes. Because Amazon is out there hurting small businesses. But it will continue to do so if only a handful of states take action & others do nothing.

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