A new Tennessee state law effective January 1, 2014 means Tennesseans will have to pay sales tax on purchases from Amazon.com.
The law comes after Amazon made a deal with Tennessee to locate distribution centers in Murfreesboro and Lebanon.
Until now, shoppers of been able to save 10% by purchasing from Amazon rather than local businesses, since they do not have to pay sales tax. That can easily add up to over $100 on large purchases.
AJ McCall of DT McCall and Sons in Lebanon told News 2 without the online sales tax, local businesses were at a distinct disadvantage.
“It's been direct competition for us in consumer electronics. We do a lot of flat screen TVs and things like that,” McCall explained, adding, “If you operate in Tennessee and you have Tennessee employees and are Tennessee-owned, you shouldn't be at a disadvantage selling goods in Tennessee.”
Until now, Amazon customers have been asked and expected to voluntarily report purchases from Amazon and pay a sales tax.
“Nobody ever did,” said McCall.
The state of Tennessee has lost millions in revenue from people not paying sales tax for online purchases.
“What happened was the state started losing that tax revenue and eventually it would put pressure on the state to raise tax rates or make some other change,” McCall said.
He continued, “They would have gotten the money one way or another [and] this is the best way to do. It impacts the consumer less, it helps Tennessee businesses and it helps jobs in Tennessee.”
Another key law taking effect Wednesday will require coaches and school athletic directors to complete a concussion safety education course and yet another law will address workforce development across the state.