First Texas. Then South Carolina. Now, Amazon.com is reportedly considering canceling plans for two distribution centers in Tennessee. Once again, the issue is sales tax collection — a sore point for the online retailer.

The distribution facilities, located near Chattanooga, could employ as many as 1,400 people in the state. Amazon.com pulled the plug on a distribution facility in South Carolina in recent weeks after it lost a tax battle in the state. That facility would have employed 1,200 people.  The online retailer made a similar decision in Texas earlier this year.

Amazon.com does not want to collect sales tax on customers in the states where it operates fulfillment centers. And, the normally press shy company, is beating that drum pretty vigorously in Tennessee where it has already committed some $139 million to the new warehouses.

Paul Misener, alluding to two states Amazon says it is leaving in response to similar situations.

“Here’s the thing: Sure, they can pass a bill and we can go and litigate it, and we’re confident that we can ultimately win,” Paul Misener, vice president of public policy tells Chattanooga’s Free Times Press. “But why would we want to come to a state that made a commitment not to harass us in this way and then, once we get there, the very first thing we face is a lawsuit? It just doesn’t make any sense. Why not go to Indiana where we’re welcome?”

Amazon.com already collects sales tax in Washington state, but the Seattle-based company does have a wide array operations beyond distribution centers here. However, the battles in South Carolina, Texas and Tennessee could spark more jobs in Amazon’s home state.

Just this week, Amazon.com announced plans to open a 500,000 square foot distribution center in Sumner. Of course, given Washington state’s geographic isolation in the Pacific Northwest, it may not make as much sense for the company to build distribution centers here, especially when compared to locations in the Midwest.

Amazon.com opened 13 fulfillment centers last year. It originally planned to open nine new facilities this year, though in a recent call with financial analysts the company said it may open more.

Tennessee Gov. Bill Haslam said Thursday that the state “does have a commitment to Amazon” and he’s contemplating ways to deal with legislation proposed by two Republican lawmakers who want to require the retailer to collect sales tax on goods sold in the state, according to the Times Free Press.

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews and Facebook.

Comments

  • http://twitter.com/Vroo Vroo (Bruce Leban)

    What is the principle that @Amazon:twitter is standing up for? Collecting sales tax is a great convenience for their customers who don’t then have to deal with computing it themselves and sending it to the state. Isn’t Amazon all about convenience?

  • Flux

    Amazon’s starting to get stupid about this now. Why should they be exempt from the rules everyone has to play by? Every state I’ve ever checked treats it essentially the same – if you have a “significant presence” (like a distribution center) in the state, you are obligated to collect tax. Not to say I might feel differently if I didn’t live in WA. If prices are the same between Amazon and a competitor, I go with the competition, knowing the shipping will take longer, but I’m not paying tax on it. I mean, I’m paying tax directly to the state in a law-abiding and responsible manner :p

  • BGN

    It seems unfair to the citizens of Tennessee to encourage a businesses to come here then tax the citizens here for it when no one else around the country pays taxes for the same purchase. Sales tax should only be charged at a physical point of sale. Unless the federal government can figure out a way for every U.S. citizen to pay the same tax no one should. Walmart, Best Buy, etc. should not be allowed to control our government in such an unreasonable manner. They are point of sale stores Amazon is not. If they think this is unfair they need to discuss it on a national level not penalize Tennesseans for it.
    Secondly why make a company leave for the slef serving interest of big box stores. No matter what you do we won’t get the tax so let’s at least get the jobs, and the reputation of keeping our word.

  • JL

    Amazon has a presence in several states that don’t require Amazon to collect sales tax. The issue for Amazon and several other companies that look at opening or expanding their operations is that they don’t have a brick and mortar store but they are required to collect taxes for the state just like they had a store front.

  • Jeffinger

    Allowing internet sales to not be taxed while requiring retailers to collect sales tax will quickly cause retailers to loose business and eventually go out of business with great loss of jobs. Internet sales must be taxed. If this is inconvieneit for Amozon to bad it is a cost of doing business.

  • Jeffinger

    Allowing internet sales to not be taxed while requiring retailers to collect sales tax will quickly cause retailers to loose business and eventually go out of business with great loss of jobs. Internet sales must be taxed. If this is inconvieneit for Amozon to bad it is a cost of doing business.

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