Four months after signing a bill that would require Amazon to charge sales tax by 2014 unless Congress acts beforehand, Gov. Bill Haslam testified before the House Judiciary Committee Tuesday morning and encouraged lawmakers to move forward on the issue.
“This is the right time for Congress to act,” Haslam said.
The governor, in Washington to testify on behalf of the National Governors Association, said that the issue was not about raising current taxes or adding new ones, but rather for states to recoup tax revenues to further fund state programs or cover federal mandates. In remarks published by The Tennessean, the governor estimated $400 million in potential state revenues were being lost annually because of uncollected taxes on items sold by giant online retailers.
“This is about states having the flexibility and authority to collect taxes that are already owed by their own in-state residents,” Haslam said. “This discussion is also about leveling the playing field for local brick-and-mortar businesses in communities across Tennessee and across the country . In the past two decades, technology has advanced more than almost anyone could have believed, and it is not only possible, but it is easy for these businesses to collect the taxes owed, just like local businesses with cash registers do.”
The governor added that he did not see his support of reform as a tax increase but rather as part of “a conversation about fairness.”
Haslam’s testimony came as committee members considered a bill that would allow states to have the option of collecting taxes on purchases made by residents from out-of-state online retailers. As part of the legislation, businesses making less than $500,000 in online retail sales annually would not be subject to any new taxes.
The legislation is similar to the Marketplace Fairness Act, which was introduced and has been promoted in past months by Sen. Lamar Alexander.