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New Deal

Gov. Bill Haslam today announced a new agreement with Amazon.com, wherein the company will bring 3,500 full-time jobs with benefits for Tennesseans. That’s an increase of 1,500-2,000 jobs from what the company had previously planned for the state.

Amazon indicates it will invest $350 million in its Tennessee infrastructure.

The company has furthermore agreed to start collecting sales taxes from Tennesseans in 2014, “unless a national solution is reached” before then, the governor, flanked by Tennessee lawmakers and Amazon representatives, told reporters at a press conference this morning.

But even though Tennesseans may start having to paying Tennessee state sales tax — among the highest in the nation — on purchases that up until now have been sales tax-free, Haslam said “this isn’t about new taxes.”

“This is about how we collect taxes in Tennessee,” said Haslam. Tennessee law, he added, already requires that Tennesseans pay sales taxes on purchases they make if the retailer doesn’t charge them for the state’s cut.

“After 2013 the responsibility for collecting and remitting the tax will shift to Amazon” from the individuals in Tennessee, said the governor.

“We’re proud that this worldwide brand has chosen to make a significant investment in Tennessee and is committed to expanding its presence here,” Haslam said. “This agreement balances meeting the needs of the company — and the needs of the state — by providing certainty to Amazon and brick-and-mortar retailers in Tennessee regarding sales tax.”

The group Alliance for Main Street Fairness, which has been critical of the state’s existing arrangement with Amazon, sent out a press release following today’s press conference saying they are not satisfied that the online distributor will wait two years before it starts collecting the sales taxes owed by Tennesseans.

“If Amazon can agree to start collecting the sales tax in one year in California, why should we have to wait one day longer in Tennessee?” said Mike Cohen, spokesperson for AMSF in Tennessee. “How many Tennessee jobs are lost, how many Tennessee businesses will close because the state grants Amazon a huge price advantage by not having to charge sales taxes?”

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