NewsTracker Tax and Budget

TN Sales Tax High, Overall Burden Low

Tennessee has the highest combined sales tax rate in the nation, a new study by the Tax Foundation shows, even as the state’s overall tax burden remains low.

Tennessee’s rate of 9.47 percent, a weighted average that takes into account the 7-cent state levy and local rates as high as 2.75 percent, garnered the state the dubious honor of first place. Arizona, with a rate of 9.12 percent, and Louisiana, at 8.86 percent, came in second and third, respectively.

But the payout at the cash register is but one piece when looking at the whole pie.

The Tax Foundation has consistently found that Tennessee has one of the lowest tax burdens of the states, a measure of what portion of residents’ income goes toward state and local taxes. On that measure, Tennessee tied with South Dakota at 7.6 percent, according to the foundation’s latest survey using 2009 data. Only two states, Alaska, at 6.3 percent, and Nevada, at 7.5 percent, had lower tax burdens. The national average is 9.8 percent.

Press Releases

Beacon Center: TN Policy Snapshot

Newsletter from the Beacon Center of Tennessee; July 31, 2012: 

Elvis, liquor, and your tax dollars

What do these three things have in common? For one, Tennessee’s welfare program. Our intrepid investigative reporter, Chris Butler, recently dug through nearly 140,000 transactions by Memphis welfare recipients using their cash benefits in the form of Electronic Benefit Transfer, or EBT cards. Among the purchases with no government oversight included transactions at liquor stores (one totaling $790), Greyhound bus tickets, Orpheum Theater concert tickets, and a tour of Graceland. Where else did they spend your money? Read the entire article at to find out.

Beacon calls for state-led welfare reform

As a result of Butler’s hard-hitting report, WMC-TV Channel 5 in Memphis ran an exclusive on his findings. As the station noted, Beacon is calling on state lawmakers to pass a law prohibiting the use of EBT cards to purchase alcohol and other non-essential items, and is also pushing for more state oversight of the welfare program. Beacon is further urging lawmakers to rebuff President Obama’s recent attempt to nix the work requirement in the existing welfare law. Watch the Channel 5 story, which details Beacon’s findings and our solution to the problem, at this link.

Taxi regs harm consumers, cost jobs

After it was discovered that bureaucrats with the Metro Nashville Transportation Licensing Commission were posing as police officers and targeting smaller limo and sedan companies, the commission has come under much scrutiny. In a recent article appearing in the Tennessean, Beacon research associate Steven Strausbaugh explains how the commission’s regulations are bad for consumers and for job creation in the Music City. Strausbuaugh calls for the elimination of the commission and a return to free market principles in the transportation business. Read more here.

Government gets into the airport business

Tennessee Watchdog has been hot on the trail of the situation at the Chattanooga Airport, where the government is funding a competitor to TacAir, a fixed base of operations that provides fuel and other services at the airport. Now, as Tennessee Watchdog’s Chris Butler explains, the issue has caught the attention of a national aviation group. The National Air Transportation Association has asked Gov. Bill Haslam to investigate why taxpayers are footing such a massive bill to unnecessarily compete against a private FBO. Read Butler’s entire story at

Business and Economy Featured NewsTracker Tax and Budget

Republicans Favor State Keeping Unexpected Revenues

Lt. Gov. Ron Ramsey says he’s standing by GOP leadership’s call to bank the $554 million in extra taxes the state collected from Tennesseans, despite calls from Democrats to give it back to voters or spend it.

Democrats, in the minority on Capitol Hill, argue the state should give the money back to taxpayers by further cutting the tax on groceries or stalling college tuition hikes.

“That’s not the way this needs to be used right now,” Ramsey, R-Blountville, told reporters Thursday. “We did not know for sure how much money we would have, and again, I think it’s good fiscal policy to keep that money in the bank until we figure it out.”

The millions of dollars represent revenues collected in excess of the state’s projections for the 2012 fiscal year which ended June 30.

Over-collecting taxes without giving some of it back is “simply irresponsible,” said House Minority Leader Craig Fitzhugh, who failed to convince Republicans at the end of the session to use what he predicted to be $400 million in excess revenues to avoid cuts to higher education and further reduce the grocery tax.

Ramsey chided Democrats for wanting to count tax dollars before they were collected.

“I think we have changed the mindset of state government this year. We’re not going to do on predicted. We’re going to do on what we know,” he said.

Fitzhugh and other Democrats want the governor to call a special session to further reduce the tax on food, which lawmakers lowered from 5.5 percent to 5.25 percent this year. They also want to freeze tuition, which the Tennessee Board of Regents and University of Tennessee Board have voted to hike by as much as 8 percent.

Haslam has said he’s not interested in a “knee-jerk special session.” His administration has maintained that the state is still uncertain how much it will actually have to dish out to absorb the costs of implementing federal health care overhauls, as they’re still deciding whether to expand TennCare under the law.

An expansion of TennCare, the state’s Medicaid program for the poor, will cost as much as $1.5 billion over five years, according to the Memphis Commercial Appeal.

Press Releases

Fitzhugh: Ignoring Revenue Upswing ‘Simply Irresponsible’

Press release from the Tennessee Senate Democratic Caucus;July 12, 2012: 

NASHVILLE – House Democratic Leader Craig Fitzhugh (D-Ripley) issued the following statement on behalf of the House Democratic Caucus regarding the June revenue collections, which showed an over-collection of $116,563,000 for the month and $554,650,100 for the first eleven months of the fiscal year:

“Back in April, House Democrats predicted that Tennessee would have excess revenue well north of $200,000,000 based on trends in over-collections. On multiple occasions, we requested that the State Funding Board call a meeting to revise their revenue projections, so the state’s budget for FY ’12-‘13 would reflect more accurate revenue figures. When the majority party ignored our calls, House Democrats put forward an alternative budget we felt was more in line with revenue trends. Our alternative budget was balanced, it cut the food tax by an additional .25 percent, it restored the 2 percent cut to higher education— which would have helped avoid the 6-9 percent tuition hikes we are seeing across the state. Our alternative budget put $20,000,000 into our community colleges and technology centers, avoided cuts to key services and reduced our reliance on bonds for capital projects. All this could have been done for less than the $200,000,000 we had in over-collections at the time. Now, with double that figure in over-collected revenue, we must act—at the very least—to lower the sales tax on food and stop tuition from continuing to climb. The economy is improving, but our families are still struggling. We have the means to make putting food on the table a little easier and make college a little more affordable. If we ignore this opportunity, it is simply irresponsible. It’s the people’s money; it should be used to their benefit—not for politics.”

Press Releases

May Revenues $15.6M More than Expected — 10th Month in a Row Collections Exceed Budget Estimates

Press release from the Tennessee Department of Finance & Administration; June 12, 2012:

NASHVILLE – Tennessee revenue collections continued an upward growth trend in May with a net positive growth of 3.40% over collections made in the same month last year. Finance and Administration Commissioner Mark Emkes reported today that overall May revenues were $871.1 million, which is $15.6 million more than the state budgeted.

“May marks the tenth consecutive month this year in which total collections have exceeded the budgeted estimates,” Emkes said. “While we’ve seen growth in sales tax collections for the past 26 consecutive months, the growth has slowed – and corporate tax collections for May were below the budgeted estimate.

“Because the national and global economies remain concerns, we will continue to closely monitor collections and expenditures for the remainder of this year in order to financially posture ourselves for the future.”

On an accrual basis, May is the tenth month in the 2011-2012 fiscal year.

The general fund was over collected by $12.4 million, and the four other funds were over collected by $3.2 million.

Sales tax collections were $17.2 million more than the budgeted estimate for May. The May growth rate was positive 4.40%. For ten months revenues are over collected by $200.6 million. The year-to-date growth rate for ten months was positive 6.97%.

Franchise and excise taxes combined were $4.2 million below the budgeted estimate of $44.8 million. For ten months revenues are $210.9 million over the budgeted estimate.

Inheritance and estate tax collections were $2.9 million above the May estimate. For ten months collections are $40.9 million above the budgeted estimate.

Privilege tax collections were $2.2 million more the May budgeted estimate, and for ten months collections are $2.4 million above the budgeted estimate.

Gasoline and motor fuel collections for May increased by 2.46%, and were $2.2 million more than the budgeted estimate. For ten months revenues are negative 0.57%, and $4.3 million below the budgeted estimate of $696.7 million.

Business tax collections were $9.1 million less than the May estimate and year to date for ten months collections are $12.3 million below the budgeted estimate.

Tobacco tax collections were $2.3 million above the budgeted estimate of $23.6 million. For ten months revenues are under collected in the amount of $10.0 million.

All other taxes for May were over collected by a net of $2.1 million.

Year-to-date collections for ten months were $428.5 million more than the budgeted estimate. The general fund was over collected by $412.4 million and the four other funds were over collected by $16.1 million. The FY 2012 revised budget assumed an over collection of $209.6 million in General Fund Taxes. Therefore, the amount over collected above and beyond what’s already in the budget is $202.8 million ($412.4 million minus $209.6 million).

The budgeted revenue estimates for 2011-2012 are based on the State Funding Board’s consensus recommendation of April 15, 2011 and adopted by the first session of the 107th General Assembly in May. They are available on the state’s website at

The State Funding Board met on December 9th and 14th to hear updated revenue projections from the state’s various economists. The board met again on December 19th and adopted revised revenue ranges for 2011-2012.

The revised ranges assume an over collection of $187.8 million to $220.5 million in total taxes and $177.0 million to $209.6 million in general fund taxes from the fiscal year 2011-2012 budgeted estimate. The revised estimates are reflected on pages A-74 and A-76 in the 2012-2013 Budget Document.

Featured Liberty and Justice News NewsTracker Tax and Budget

Slow Gov’t Services an Extra Burden on Taxpayers: Haslam

Whether it’s inefficient state workers or lagging technology at driver’s license centers, the public essentially pays an additional “tax” any time government services are slow, Gov. Bill Haslam said this week.

“I think there’s two kinds of taxes. There’s a tax that people pay, sales tax, income tax or whatever tax you’re paying. And then there’s the tax that you pay when you don’t get full value for government service,” he told the Tennessee Digital Government Summit in Nashville Tuesday.

“When we don’t give you full value, that’s another tax. We just don’t call it that,” he said.

The governor didn’t wager a guess as to how much the public is paying in that tax each year when speaking to the information-technology experts. But he announced that the state is now trying to reduce the cost with technology upgrades at driver service centers.

“I think there’s some what I would call just basic customer service issues about how committed we are to making certain that customer gets in and out quick,” he told reporters after speaking to the summit. The Department of Safety is also tackling changes to how driver’s license centers manage information and working to put the “right number of employees in the right places,” he said.

NewsTracker Tax and Budget

Volunteer State Taxpayers Off the Hook Earliest: Study

Tennessee, which has one of the highest combined state-and-local sales tax rates in the country, also has the lowest overall tax burden, according to a report released recently by one of the nation’s oldest organizations that tracks such data.

The Washington, D.C.-based Tax Foundation releases its Tax Freedom Day report each year. The study calculates how many days into the year all Americans would have to work if they were forced to work every day — with no weekends or holidays off — until they fulfilled the year’s tax burdens their elected officials have shouldered them with. This year’s U.S. Tax Freedom date is April 17, but Tennesseans fulfilled their theoretical tax obligation work-load on March 31, making the state the earliest in the country this year.

The Foundation calculates the freedom date by “dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year,” according to its website.

“Tennessee is a very low tax state overall, and though it has the highest sales tax, it has no individual income tax,”said  Will McBride, author of the Tax Foundation study.

McBride added that the group lumps state sales and property taxes together, and that when taken together, the state ranks below average in tax burden. “The main reason is that the federal personal income tax is the largest tax burden and that’s driven by average income,” he said. “And Tennessee is a below average income state, as are many of the surrounding states.”

The Tennessee Senate’s Republican and Democratic leaders were both circumspect when TNReport asked for their views on the state’s No. 1 ranking.

“It’s a good thing,” said Sen. Mark Norris, R-Collierville. “But we need to keep it all in perspective. It’s compared to other states, and some states are mighty bad. I’m glad we’re on the better end of that scale, and we want to keep us that way.”

The state has to be mindful of the fact that there will be several bills coming through in the future that cost money, and lawmakers need to manage the budget to live within the state’s means but still be able to meet those needs, Norris said.

“What it does mean is we provide minimal government services, and we are dependent on the private sector to direct the government in more of a way where there’s more government spending,” said Memphis Democrat Jim Kyle, the Senate minority leader. “We have fewer social programs, we depend more on charity.

“But we’re also one of the highest-rated states with a percentage of people who are charitable givers. It just shows that Tennesseans are more self-reliant, and seem to be pleased with that,” he said.

The flip side is that people who for example are mentally or physically disabled or have children with special needs don’t get the taxpayer-financed assistance that may be available in higher-tax states, Kyle said.

The fact that it took the state a shorter period of time to pay the taxes that were owed is a good sign for Tennessee, said Rep. Charles Sargent, R-Franklin, chairman of the House Finance Committee.

“Next year, I think we’ll be two or three days earlier than we were this year, with lowering taxes,” Sargent said.

Business and Economy Liberty and Justice Tax and Budget Transparency and Elections

Watson Working for Tax-Ruling Transparency

Hixson Republican Bo Watson backed off state legislation this year that would bring transparency to so-called “private letter rulings” — written statements issued to taxpayers from tax-collection agencies — because he was satisfied with efforts by the Tennessee Department of Revenue commissioner to do it on his own.

But even Sen. Watson remains uncertain if the effort for more openness is workable, because of privacy issues related to the rulings.

Private letter rulings have become a point of attention in the state this year because of the ongoing controversy over and its exemption from collecting sales taxes. Speculation has risen that Amazon may be benefiting from a letter ruling from the state, but such information has never been made public.

In fact, Watson said his dealings with Commissioner of Revenue Richard Roberts on making letter rulings more public have had “zero” to do with Amazon in particular. He — and apparently Roberts — just want more openness on the letter rulings issued by the department. An effort to reach Roberts on Wednesday was unsuccessful.

The Knoxville News-Sentinel reported Wednesday night that the Department of Revenue has initiated a shift in policy from the previous administration. The report said the department has issued 40 letter rulings this year and that 17 redacted versions will be made public, with another 15 still under review and eight kept secret.

Watson, the new speaker pro tem of the Senate, this week described some of the difficult issues surrounding letter rulings apart from the Amazon controversy. But he also spoke about his thoughts on the Amazon issue. The company is establishing two distribution centers in the Chattanooga area, one in Hamilton County and one in Bradley County. Watson’s district is part of Hamilton County. A third Amazon center is planned for Lebanon.

Watson said conversations have gone well with Roberts in trying to open up the letter rulings.

“Revenue has been working with me very cooperatively in trying to figure out a methodology that we might be able to do that,” Watson said. “The challenge is the privacy issue.”

There are two types of private letter rulings. One addresses a specific tax question as it relates to a specific business. Then there are letter rulings where a specific company asks a question but the answer has general application.

“So you want the public to be advised of those letter rulings that have general application,” Watson said. “How do you achieve that without revealing the source of the letter ruling?”

Watson’s SB0902 would require that a copy of any revenue ruling or letter ruling issued on or after Jan. 1, 2008 be made available for public inspection in accordance with current public records law. It calls for posting the ruling on the department Web site within 15 days of the date of the ruling, and it calls for the commissioner to redact from the ruling anything, like a name or address, that may identify the taxpayer who requested the ruling.

Watson said he introduced the bill because businesses had had frustrations with the administration of Gov. Phil Bredesen, whose term ended this January.

“They would go in with a tax situation and find out that there had been a letter ruling about it, but they didn’t know anything about the letter ruling. So it frustrated their business process,” Watson said. “So anyway, I introduced a bill to make private letter rulings more public.

“The challenge is that much of the information has to be redacted because obviously a business’s tax information is their private proprietary information if they ask a specific tax question. If the tax question has general applicability, how do you get that answer out to the public without revealing the source of the question?”

Simple deduction comes into play, he said.

“If a large company asks a question and you describe them as a large company with X number of employees, people will figure out who asked the question,” Watson said. “The commissioner, in our conversation, said, ‘Look, we’re going to be much better about issuing the response to these letter rulings than perhaps in the past.'”

Watson said Roberts believes the department can make changes without necessarily having a law to do it. Watson is going to sit back and see how it goes. If the department is unable to achieve the goal, then Watson said he would at least pursue debate on the issue.

Sen. Randy McNally, R-Oak Ridge, chairman of the Senate Finance Ways and Means Committee, this week said he appreciates efforts in the administration of Gov. Bill Haslam to address transparency on letter rulings. McNally has been an active player in the attempt to get Amazon to collect the sales tax.

But the issue of letter rulings is just one facet of the broad tax-collection ramifications surrounding Amazon and other online retailers. Haslam recently said he wants Amazon to collect sales taxes in a way that satisfies Amazon and the state. Haslam has also said he wants the state to honor its original commitment to Amazon, which was made by the Bredesen team.

Watson said he was not surprised by Haslam’s remarks and that that’s what he thought would happen all along. He said he got the impression there would be more discussions from what he heard in legislative hearings on Amazon this year.

When Haslam first made public remarks this month about wanting Amazon to collect the taxes, Watson said he was in San Antonio for the legislative summit of the National Conference of State Legislatures and got a heads-up phone call from Warren Wells of the governor’s staff to let him know about Haslam’s comments.

Lt. Gov. Ron Ramsey, who was at the San Antonio conference, did not get a similar phone call.

“He did not get a call from the governor last week, but they have had ongoing discussions about this issue,” said Adam Kleinheider, a spokesman for Ramsey. “So his comments did not surprise him in any way, and he is 100 percent on board with the governor.”

The NCSL summit included a discussion of e-commerce issues. A similar session was held at the Southern Legislative Conference last month in Memphis.

“As Internet commerce continues to grow, we’re all going to have to recognize that this is a new business model, and states, along with the federal government, are going to have to figure out a way to create tax equity among all the various means of commerce,” Watson said. “I don’t think it’s reached the tipping point where Congress is going to be motivated to act.

“If you’re Amazon, you want tax equity with all the other Internet retailers that may be working under the same model you’re working under — just as the bricks-and-mortar folks want tax equity with the Internet folks.”

Watson said he hasn’t had much contact with retailers since the Legislature adjourned this year, but he has heard from constituents who say a deal is a deal and that original agreements with Amazon should be honored. He said the only contact he has had with Amazon other than the hearings was a five-minute meeting in his office prior to the committee meeting.

Watson said people need to remember that the sales tax still applies to the transaction and the question boils down to who collects the tax, not whether it is owed.

“The state doesn’t aggressively pursue that, and I don’t think we’re going to encourage them on small-ticket items to aggressively pursue that,” Watson said.

Haslam has said Congress needs to settle the issue for the states.

“All states are trying to figure out how to deal with this new marketplace,” Watson said. “The challenge is how do we modernize the law to marry up to the new Internet commercial market that in the last five years has grown exponentially?” is an independent, not-for-profit news organization supported by donors like you!

Press Releases

June Tax Collections Up

Press Release From the State of Tennessee, July 11, 2011:

NASHVILLE – Total tax collections for June were above state budget estimates for the month. Finance and Administration Commissioner Mark Emkes today announced that overall June revenues were $1.07 billion, which is $31.8 million more than the state budgeted. June sales tax collections represent consumer spending that took place in the month of May.

June marks the 11th consecutive month this fiscal year in which total collections have exceeded the budgeted estimates. Sales tax collections in June recorded the 15th consecutive month of positive growth, exceeding the budgeted estimate, and corporate tax collections also performed above June expectations.

“Tennessee’s revenue collections continue to show a positive growth trend, but the latest national leading economic indicators point to a very slow economic recovery,” Emkes said. “This will require us to continue to closely monitor collections and expenditures for the remainder of this year in order to end this fiscal year with a balanced budget.”

On an accrual basis, June is the eleventh month in the 2010-2011 fiscal year.

The general fund was over collected by $31.1 million, and the four other funds were over collected by $700,000.

Sales tax collections were $28.8 million more than the estimate for June. The June growth rate was 6.32%. For eleven months revenues are over collected by $195.6 million. The year-to-date growth rate for eleven months was positive 4.60%.

Franchise and excise taxes combined were $29.6 million above the budgeted estimate of $253.2 million. The growth rate for June was 13.18%. For eleven months revenues are over collected by $47.8 million and the year-to-date growth rate was 6.99%.

Privilege tax collections were $3.7 million below the June estimate. For eleven months collections are $9.7 million below the budgeted estimate.

Business tax collections were $20.3 million less than the June estimate. Year-to-date collections for eleven months are $38.8 million below the budgeted estimate.

Inheritance and estate tax collections were $800,000 below the June estimate. For eleven months collections are $26.7 million above the budgeted estimate.

Tobacco tax collections were $1.6 million below the budgeted estimate of $29.5 million. For eleven months revenues are under collected.

Business and Economy Featured News Tax and Budget Transparency and Elections

Amazon Debate Centers on Details of State Incentives

A clash over Internet sales tax collections regarding Tuesday became yet another arena of questions over what sort of deal former Gov. Phil Bredesen struck with the online sales giant.

Sen. Randy McNally, R-Oak Ridge, has proposed legislation that would force businesses such as Amazon, which is dramatically increasing its presence in the state, to collect sales taxes on consumer purchases in Tennessee. Amazon opposes such legislation, questioning the constitutionality of such a law.

But discussion over McNally’s proposal led lawmakers to ask yet again what exactly was done in the Bredesen deal that landed Amazon distribution centers in Hamilton and Bradley counties.

Action was deferred on the legislation, as was the companion bill in the House, until next week, but there appears to be no waning of curiosity among lawmakers about the Amazon agreement — including whether the deal is even in writing.

“There are a number of questions that I have — the committee has — certainly the issue of transparency, the issue of fairness, the potential of economic impact from jobs, versus fairness to existing businesses that are here and collecting sales tax on behalf of the state,” McNally, chairman of the Senate Finance Ways and Means Committee, told reporters.

McNally said his intention is to clarify state law on sales tax requirements on businesses that have a presence in the state — an element of the issue that has become open to debate.

One side of the issue argues that letting big distribution companies like Amazon slide on sales tax collections is unfair to the bricks-and-mortar retail businesses that are increasingly failing to compete with the Internet presence of Amazon and businesses like it.

Advocates for Amazon say the sales are being conducted in the home state of Washington, that the presence in Tennessee is only for distribution of the product and that there is no real retail presence of Amazon in the state.

Amazon has reportedly said if the legislation is passed in Tennessee it will take its books and go elsewhere, where the business climate is friendlier. Further, Amazon has reportedly increased the stakes, saying it has also prepared to build distribution centers in Knoxville and Nashville.

The emergence of Amazon in Tennessee has become a significant issue because its presence would bring more than 1,000 jobs to its East Tennessee centers and potentially as many more in new locations in Nashville or Knoxville.

Tennessee has actively recruited businesses that have the potential to create jobs. Gov. Bill Haslam has said he wants to honor commitments to large companies that were made by the previous administration.

But legislators continue to be frustrated by the lack of knowledge of precisely what those commitments were.

Even if the governor and lawmakers back the previous deal, Amazon’s flirtation with new distribution centers ups the ante on whether to force the company to collect sales taxes on its transactions.

Haslam has said that ultimately the Internet sales tax issue would require a multi-state solution because no single state could remedy the problem on its own.

The discussion in the Finance committee Tuesday appeared to show Republicans and Democrats of like mind. Both parties understand the importance of sales tax collections in state revenue.

“It’s an issue that of course involves jobs, but it’s an issue that involves fiscal policy in the state,” McNally said. “This is not a tax issue, it’s really a tax collection issue.”

Sen. Joe Haynes, D-Nashville, said during the meeting, “It almost seems like somebody’s playing games with us, because you know our tax base is based on our sales tax, and that’s pretty important to us.

“It doesn’t seem fair.”

Braden Cox, director of state public policy for Amazon, told legislators the sites planned for Tennessee are “fulfillment centers” for the orders that go through Amazon.

“Fulfillment centers. This has become a new term of art,” said Sen. Mark Norris, R-Collierville, the Senate majority leader.

“I’m trying to look at this from your point of view,” Norris said. “But I’m having the same difficulty Senator Haynes has.”

When Haynes referred to Amazon sites as “stores,” a lobbyist for Amazon corrected him by saying they are “warehouses,” not stores, and noted that a consumer can buy boots from L.L.Bean without paying sales taxes.

Much of the discussion centered on the commerce clause in the U.S. Constitution, from Article 1, Section 8, that authorizes Congress to regulate commerce between several states. The issue also involves the due process clause from the 14th Amendment.

The due process clause says no state shall deprive any person of “life, liberty or property without due process of law.” The U.S. Supreme Court has ruled that the due process clause prohibits a state from taxing a company unless there is “minimal connection” between the company and the state.

A key case study involved Quill Corp., a mail order company incorporated in Delaware, that made catalog sales. The North Dakota Supreme Court ruled that there was sufficient presence, known as “nexus,” of Quill in the state and that Quill had to collect the state’s sales tax. But the U.S. Supreme Court overruled the state court, saying the case did not represent sufficient nexus as it related to the commerce clause.

Norris said there is risk in affording one company like Amazon a tax break that is, in turn, disadvantageous to other businesses in the state and could interfere with their interstate commerce.

But in the end, some of the biggest questions among lawmakers remained on deals in the Bredesen administration.

McNally asked Cox directly what the agreement was and if it was in writing. Cox referred to statutory economic incentives available to any company and that there had been “commitments made” regarding sales tax collections. He said they were made in a “business context.” He said he couldn’t speak to the legal nature specific to the state.

Lt. Gov. Ron Ramsey has been out front seeking answers to exactly what deals were made under the previous administration, at one point calling for a meeting with Matt Kisber, who was commissioner of Economic and Community Development under Bredesen.

McNally picked up that ball on Tuesday.

“I think it’s important for the people of Tennessee to know what the deal was, what we ended up giving away in order to get the jobs in the centers,” McNally told reporters.

Senate Judiciary Chairwoman Mae Beavers, R-Mt. Juliet, echoed concern about tax breaks.

“I think we’ve got to be very cautious on giving all of these tax breaks to companies because ultimately the taxpayers in Tennessee end up paying for it,” Beavers said Tuesday.

“I’m not sure how many jobs we’re talking about, and that would have an impact on some things I think. We just keep giving company after company tax breaks. How long can we afford to do that?”

Andrea Zelinski contributed to this story.