Former Tennessee Economic and Community Development Commissioner Matt Kisber said Saturday night he does not remember if the controversial Amazon.com tax arrangement with the state was ever put in writing.
The question of whether the Amazon deal was actually put on paper or was the result of a handshake deal has been one of many questions surrounding the agreement, which was made during former Gov. Phil Bredesen’s administration, in which Kisber served.
The Tennessee Department of Revenue commissioner at the time, Charles Trost, has previously refused to comment on specifics of the Amazon arrangement, as has Bredesen.
Amazon struck a deal with Tennessee in the waning weeks of Bredesen’s second term, where the Internet sales giant would build two distribution plants in the state and not have to collect sales taxes on its transactions — as opposed to the collection of the sales tax by the many bricks-and-mortar retailers in the state.
Some lawmakers, including chairs of both the House and Senate finance committees, have criticized the deal with Amazon, saying it gives Amazon an unfair competitive advantage.
Amazon has committed to building two distribution centers in southeast Tennessee, one each in Bradley and Hamilton counties, where the company agreed to provide more than 1,000 jobs. The Bredesen team made the deal under the presumption that if it did not offer the incentive on tax collections, Amazon might take its distribution centers — and the jobs that go with them — to another state, like Georgia. Amazon, it was recently reported, has offered 1,500 people jobs at the Bradley and Hamilton centers.
Amazon recently announced a third Tennessee distribution center, in Lebanon in Wilson County.
The issue of transparency on letter rulings — written statements on tax issues for specific taxpayers — from the Department of Revenue has risen during the Amazon debate. When lawmakers considered the Amazon deal during the legislative session this year, one of their questions was whether Amazon’s agreement was ever formally put on paper.
When asked Saturday night at the Tennessee Democratic Party’s Jackson Day Dinner in Nashville if the Amazon agreement was in writing, Kisber gave a long pause.
“I don’t actually remember,” he said, then taking another pause. “I really don’t. I don’t know if we got an MOU (memorandum of understanding). That’s so far back now, in terms of what I’ve been dealing with, I don’t … I don’t honestly remember. I would have to defer to the current administration.
“I remember the discussions. I remember everything we discussed, but I don’t remember if it got … if there was a written agreement or not.”
Kisber and former Revenue Commissioner Reagan Farr have launched Silicon Ranch Corporation, a solar power development business, since leaving office. Bredesen is chairman of the operation.
Richard Roberts, current revenue commissioner under Gov. Bill Haslam, has refused to comment on Amazon’s deal, citing policies that prevent him from discussing agreements with private taxpayers.
Kisber said the project was in the works for many months and that there were multiple discussions involved in the deal. He recalled people on the site selection team, both on the consultant side and the company side, in the dealings with Amazon.
Haslam has announced his administration is talking to Amazon about a long-term arrangement in which Amazon would, in fact, collect the sales taxes, a development that has extended the debate over the issue and led to renewed discussion about the Bredesen deal. Haslam has said there would be openness on the long-term arrangement if and when one is completed.
Haslam had been elected, but not sworn in, when Bredesen informed him of his plans with Amazon. Haslam said he would agree to honor Bredesen’s commitment.
Kisber said the issue, as it was explained to him, involved third-party handling of the products being sold.
“I was told we were not talking about Amazon books and CDs. We were talking about companies for whom Amazon provides fulfillment services through their Internet platform,” Kisber said. “There are hundreds of companies that you buy from if you use Amazon that is not being sold by Amazon but is being fulfilled (by Amazon).
“And Tennessee has other companies that provide that type of service as well. This was consistent in my thinking with the services of those types of companies.”
Kisber complimented Haslam’s handling of the issue.
“Whenever an economic development project becomes political theater, it impacts the state’s reputation for business,” Kisber said. “And I commend Governor Haslam for working to resolve the issue and tone down the rhetoric so Tennessee can focus on its wonderful business climate and using that to attract projects to the state.”
Kisber attributed his inability to recall specific details on the Amazon deal to the passage of time since he worked for the State of Tennessee.
“I will be honest with you. I loved state government, and January 15 I left it. I have been focused on my business endeavors. Doing a start-up business is challenging enough,” Kisber said. “So I have been available if the current administration has any questions. But I have left that phase of my career.”
Kisber said he remembers Bredesen, Trost and Comptroller (Justin) Wilson being involved in the Amazon matter.
“As was the case on all projects, I was the lead for the state,” Kisber said.
He said there was unanimous concurrence on the rationale for the deal.
“I think most everyone involved was in complete agreement,” Kisber said. “We could get the jobs and not have the collections, or you could not get the jobs and not have the collections. The issue was one that was going to be resolved, in Governor Bredesen’s opinion and mine, that it was going to take a national solution.”
The concept of a national solution involves Congress acting in a way that would make the sales tax policies uniform among the states.
Kisber had been involved in the streamlined sales tax project that would bring all states in line under one agreement, going back to his days as a state legislator.
“I have been intimately involved and familiar with this issue from the very beginning,” he said. “And while we were advocating at that time, as a legislator, a common state solution, we all said the best solution would be a national solution, and I still believe the best solution is a national solution.”
There has been broad skepticism, however, that Congress would involve itself in the issue. A common belief is that forcing online retailers to collect sales taxes would make Congress appear to be advocating a new tax, even though such an act would only guarantee the collection of existing taxes. Others have argued that the issue would become so compelling for states collecting revenue that Congress would be forced to take action on their behalf.