The state of Tennessee has legislation in process to incorporate the "Amazon Tax" into their Sales and Use Tax Code.

This legislation is in both the House and Senate:

• State Bill 1741, sponsored by Senator Beverly Marerro
• House Bill 1947, sponsored by Rep. Johnny Shaw

Here's the text of both Bills:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE: SECTION 1. Tennessee Code Annotated, Title 67, Chapter 6, Part 2, is amended by adding the following language as a new section: § 67-6-235. A person making sales of tangible personal property or services as described in § 67-6-201(12) and taxable under this chapter shall be presumed to be soliciting business through an independent contractor or other representative if such person enters into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an internet web site or otherwise, to such person, if the cumulative gross receipts from sales by such person to customers in the state who are referred to such person by all residents with this type of an agreement with such person is in excess of two thousand dollars ($2,000) during the preceding four (4) quarterly periods ending on the last day of February, May, August and November. This presumption may be rebutted by proof that the resident with whom such person has an agreement did not engage in any olicitation in the state on behalf of such person that would satisfy the nexus requirement of the United States constitution during the four (4) quarterly periods in question. Nothing in this subsection shall be construed to narrow the scope of the terms independent contractor or other representative for purposes of this chapter. SECTION 2. This act shall take effect July 1, 2009, the public welfare requiring it.

Added: Worth noting is that the Fiscal Impact Report that goes along with the TN bills acknowledges that affiliates are not enough to constitute nexus because customers pay dealers directly. Therefore the impact has been deemed "Not Significant".

See Melanie Seery's comments on this for more information, and read the Fiscal Note directly.

Don't wait for your state to do the same. Contact your representative to let them know these laws affects real small businesses in their state.