Amazon Opponents Release Study to Support Sales Tax Case

Opponents of a sales tax exemption for Amazon.com say the break could cost the state nearly 7,000 jobs next year.

A private study funded by the Alliance for Main Street Fairness – a coalition of Amazon’s competitors – takes work from the University of Tennessee and goes several steps further. A UT study estimated that next year, more than $400 million of sales tax revenue will be lost because of e-commerce.

Big box retailers and small businesses in Tennessee hired market researcher Sharon Younger, who used UT’s data and found that if the state has less money to spend on building projects and other services, nearly 7,000 jobs will be lost.

“Not only did you lose the sales tax revenue that was lost to e-commerce, but as you lose employment and you lose spending, you lose another round of taxes.”

But, Younger’s study does not consider the potential jobs created next year by Amazon, which has at least three distribution centers planned, including two in the Chattanooga area and one in Lebanon.

Allen Doty is a co-owner of Nashville’s Cumberland Transit.

The Alliance for Main Street Fairness includes big box stores like Walmart down to mom-and-pop outfitters like Nashville’s Cumberland Transit. Co-owner Allen Doty says more and more, customers use his outdoor store to try gear on and then go online to make the purchase tax-free.

“In fairness to a lot of our shoppers, if I could save 10 percent on every item I bought, I’d be sorely tempted to do my shopping online.”

Doty says Amazon’s sales tax advantage is not killing Cumberland Transit, but he still wants a level playing field.

Governor Bill Haslam has said there needs to be a national solution to the online sales tax collection issue. He’s agreed to let Amazon maintain its exemption, even as it builds distribution centers here. Others states, like California, have recently struck compromises with Amazon to collect sales taxes.