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TFT: Amazon-Style Tax Incentives Drain State Resources

Press Release from Tennesseans for Fair Taxation, Sept. 27, 2011:

Revenue with Justice: State Must Hold Corporations Accountable for Tax Obligations

Sept. 27, 2011: Three billion dollars in potential state revenue and 10,000 Tennessee jobs are projected to be lost if Amazon.com is granted a proposed exemption from collecting Tennessee sales taxes, according to a study released last week by the Alliance for Main Street Fairness. Tennesseans also learned last week that Amazon employees allege some of the corporation’s distribution centers resemble sweatshops, with this report from the Allentown, PA, Morning Call: “During summer heat waves, Amazon arranged to have paramedics parked in ambulances outside, ready to treat any workers who dehydrated or suffered other forms of heat stress. Those who couldn’t quickly cool off and return to work were sent home or taken out in stretchers and wheelchairs and transported to area hospitals. And new applicants were ready to begin work at any time.”

Tax incentives like the one Tennessee officials are proposing for Amazon drain the state of millions in revenue every year, with little accountability for the reality or quality of the jobs the companies purport to create. It was reported last week by the Commercial Appeal that closed-door meetings resulted in over $300 million in similar tax breaks to the Electrolux corporation there, including an agreement by state and local governments to not recover taxpayer money in the event the corporation fails to meet its job creation and investment promises to the state.

Concerned Tennesseans will gather in Nashville, Tenn., Oct. 1 at Tennesseans for Fair Taxation’s Annual Meeting to strategize the organization’s work for tax fairness, including holding corporations like Amazon and Electrolux accountable for meeting the same tax obligations our small, local businesses adhere to every day and for giving back to the great state of Tennessee by contributing to its revenue stream.

“Anyone concerned with budget cuts in Tennessee and anyone who wants millionaires and corporations to pay their fair share in taxes is invited to attend our meeting Oct. 1 and join the fight for revenue with justice for all Tennesseans,” says Elizabeth Wright, Executive Director of TFT. “We all support job creation and employment opportunities for Tennesseans, but the Amazon and Electrolux deals are not good for Tennessee. These are not the working conditions Tennesseans deserve, and these corporations should certainly not be rewarded with tax exemptions and incentives that aren’t available to our homegrown, job-creating neighborhood businesses and retailers.”

In fact, there is no justification for requiring only some retail sellers to collect and remit state sales taxes from their buyers.  “Amazon appears to be the worst offender because its sales volume is so huge and is growing every year,” says Phil Schoggen of Nashville, Tenn., a member of Tennesseans for Fair Taxation. “The proposal to exempt the online giant from collecting sales taxes is particularly disastrous to Tennessee which relies so very heavily on the sales tax to fund the state’s vital public structures. In addition, Amazon also follows very selfish and unusual labor practices with workers in their distribution centers, like the ones they are building in Tennessee, according to the American Rights at Work organization.” Amazon workers’ complaints include that they are required to work in room temperatures where the heat index can reach 114 degrees, the company demands such speed in the work of employees that they suffer injuries and are threatened with termination for being too slow, and Amazon relies on temporary workers to drive down wages and to make it hard for workers to collectively stand up for their rights.

Amazon reports large profits every year, even while Tennessee’s small businesses close their doors and lay off their employees, with the corporate practice of bullying states into such sales-tax exemptions as Tennessee is considering, and with the shoddy labor practices alleged last week by its own employees.

Let’s be fair and quit coddling corporations like Amazon and Electrolux.

For more information about holding corporations accountable for tax obligations or for information on attending the TFT Annual Meeting Oct. 1 in Nashville, Tenn., please contact Elizabeth Wright at Elizabeth@fairtaxation.org or 865-687-9600×14.

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