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VOL. 35 | NO. 33 | Friday, August 19, 2011




Haslam: Tenn. keeping word on Amazon tax deal

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CHATTANOOGA (AP) — States competing for industrial investments would be "dead wrong" to claim that Tennessee doesn't keep its commitments in economic development deals, Gov. Bill Haslam said Wednesday.

The state is keeping its word with Amazon.com on waiving a requirement for the online retailer to collect state sales taxes on items sold through distribution centers being built in Tennessee, the Republican governor told reporters before a speech to the Chattanooga Area Chamber of Commerce.

The deal was struck by then-Gov. Phil Bredesen, but was OK'd by Haslam before he was sworn into office in January.

Some state lawmakers have since raised questions about whether the deal is fair to existing retailers in the state, and the Haslam administration has been in talks with Amazon over adjusting the terms of the arrangement in the future.

Haslam dismissed speculation that other states could try to exploit a perception that Tennessee isn't sticking to the original deal.

"We are keeping our word," he said. "They're dead wrong, and we're in the middle of very productive conversations with Amazon."

"Recruiting business is no different than recruiting athletes," he said, "If one school says something about the other, it doesn't necessarily mean it's right."

Amazon has said it will employ more than 1,200 full-time workers at facilities in Hamilton, Bradley and Wilson counties, plus thousands more on a part-time or seasonal basis. The company has said it would be willing to collect the tax if a federal law covering all online retailers were enacted. But such regulations don't appear imminent.

Alabama Development Office Director Greg Canfield said his state hasn't made a concerted effort to send a message to prospects that his state is more likely to honor its commitments than its neighbor to the north.

Canfield said Alabama has not said anything about Tennessee in any communication, but if they did send message about honoring commitments it would be in face-to-face meetings.

"I can assure you, we do honor our commitments," he said.

House Majority Leader Gerald McCormick, R-Chattanooga, said he has no doubts Tennessee will follow through on the deal, but agreed that it sends a bad signal for state lawmakers to raise questions after the fact.

"It does concern me, and that's why legislators don't need to advocate breaking deals that have been made," McCormick said after Haslam's speech at the Chattanooga Convention Center. "Because just as we all predicted, in other states they'll use that against us."

McCormick said ongoing talks with Amazon concern potential future expansion.

"If they wanted to come in and make some additional investments, then they would be willing to open the previous agreement," he said. "Only if it's voluntary though.

"Like I've said before, Amazon's interested in selling things, not in arguing with legislators and in courtrooms."

State Sen. Bo Watson, R-Hixson, said he sees no reason not to be in discussions with Amazon over the tax question.

"I would not define this as a renegotiation," Watson said. "I would define it as this: Are there ways that we can work together to solve this problem that all 50 states are facing?

"Maybe in the course of the conversations, Tennessee might come up with a solution that works for all the other 49 states," he said. "So I think it's fine."

Haslam said he's not concerned that his talks with Amazon will hurt future economic development deals.

"We feel very, very good about our position," he said.

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