Visiting Chattanooga Tuesday, Sen. Lamar Alexander said he'd like to get more decisions "out of Washington," including states' preferences to collect sales taxes for purchases made online. 

"Someone actually said to me they didn't trust the states to make that decision, and I almost laughed at them," Alexander said during remarks made to members of the city's Better Business Bureau. "I said, 'Wait a minute—[Tennessee's] got a AAA bond rating, no state road debt, a conservative government, and Washington's out of control. And you don't trust Gov. [Bill] Haslam and Lt. Gov. [Ron] Ramsey and our state legislatures to make a decision about whether to discriminate in favor or against Tennessee businesses?'"

The senator's remarks were in regards to the Marketplace Fairness Act, a bipartisan bill passed by the U.S. Senate earlier this month that would allow states to collect sales tax for online purchases made by residents from out-of-state retailers. 

Alexander was a chief sponsor of the bipartisan bill, which was approved in a 69-27 vote May 6.

The bill has yet to be considered in the House. 

Alexander, 72, who is running for his third Senate term, suggested in his remarks to attendees at the luncheon that one of the most important things federal officials could do was remove the "big wet blanket of taxes and regulations" off of businesses so that they could "flourish."

Later, the senator and former two-term governor suggested the Marketplace Fairness Act as written could enable Tennessee to lower its state sales tax rate.

"It would be up to the state to decide what to do, but Tennessee has a very high sales tax rate," Alexander said in an interview with "And it's got a lot of people who are not, right now, paying the tax they already owe. So if tax is collected from everyone who owes it, you can lower the rate and collect the same amount of tax."

Currently, online shoppers are required to voluntarily pay state sales taxes for purchases made from retailers in respective states, but the majority don't keep track of any taxes owed. 

Alexander cited both Ohio and Wisconsin as states that have already committed to lowering tax rates to some degree if the Marketplace Fairness Act were signed into law. 

"Ohio's already passed a law that said if the Marketplace Fairness Act goes into effect and allows Ohio to treat out-of-state sellers the same way they treat in-state sellers … they're going to lower their income tax rate," he said. "The governor of Wisconsin, Gov. Scott Walker, has said the same thing."

Earlier this month, Walker wrote a letter to state representatives saying any additional revenues brought in by the bill would be used to "provide individual income tax relief" for Wisconsin residents. But a spokesman for Ohio Gov. John Kasich said the governor had not taken a position on the bill. 

Rob Nichols, spokesman for Kasich, told a provision regarding the Marketplace Fairness Act had been included in a budget proposal from the state House of Representatives earlier this year but had not been championed by the governor, as Alexander had suggested. 

No law has been passed in Ohio, Nichols said.  

"There was a provision in the House-passed budget that would drive down Ohio's income tax if the bill were to pass in Washington," Nichols said. "It's unclear at this time what the Senate is going to do with that provision. As far as the larger bill in Congress, it's something that our policy team is looking at. We haven't taken an official position on it."

In Tennessee, a spokesman for Gov. Bill Haslam said the governor was not yet decided on how additional revenues procured through online purchases could possibly be used to offset other state taxes. Haslam, a supporter of the bill, has said in the past that Tennessee has forgone an estimated $400 million in tax revenues because of the loophole. 

Dave Smith, spokesman for Haslam, said that the governor was waiting to see the bill's fate at the federal level before announcing how Tennessee would use any added revenues brought in by sales tax collected from online purchases. 

"There's still a long way to go at the federal level, and stuff is still evolving," Smith said in remarks to '"So we don't want to count the chickens before they hatch, if you will."

Smith added that the state's decisions on how to use any added revenues would be part of a "public discussion."

As proposed, the bill would not apply to any out-of-state sellers with less than $1 million in annual remote sales. Chattanooga-area House members Reps. Chuck Fleischmann and Scott DesJarlais have offered no indication as to whether they would support the legislation were it to come to a House vote. 

Alexander also said online retailers would come to the realization that collecting sales tax will be inevitable.

"I think most out-of-state sellers see the writing on the wall," he said. "They're going to start collecting the sales tax."