Bill Haslam

Online sales are soaring. State budget deficits are growing. And tax-free internet sales are once again in the spotlight. Congress is considering bills that would level the playing field by allowing states to require all online merchants doing business in that state to collect sales tax. Web retailers have largely had a free ride since a 1992 Supreme Court ruling that only merchants with a physical presence in a state are responsible for collecting sales tax.

Two leading law professors have concluded that Amazon recently opening large “fulfillment” warehouses in South Carolina and Tennessee is a likely violation of the Constitution’s commerce clause.

Gov. Bill Haslam confirmed a sales tax deal with online retailer Amazon.com on Oct. 6, announcing thousands of additional jobs and what he hopes will be the resolution of a long-running dispute within the business community.

When it comes to avoiding the requirement of collecting sales tax from its consumers, Amazon isn't afraid to open its wallet. More than nine months before a proposed June 2012 referendum asking that California’s new internet sales tax law be overturned, Amazon has already spent $5.25 million, state records show, more than any company has spent in California this far from a vote in at least a decade.

State officials in Tennessee are raising questions whether Amazon.com should start collecting sales taxes from state customers. The company is building three distribution centers in the state and some legislators believe Amazon should begin collecting sales taxes there.