What did state gain by saying ‘no’ to Amazon?
Independent Mail
Monday, May 2, 2011Last week, when S.C. House lawmakers turned down a five-year exemption on sales tax collections for online retailer Amazon.com, the company reacted quickly to the 71-47 vote. It stopped construction at the Lexington distribution center site, canceled $52 million in procurement contracts and removed S.C. job postings from its website.
Only three area House members supported the exception: Reps. Dan Cooper and Mike Gambrell, both Anderson Republicans, and Pickens Republican B.J. Skelton. They showed courage in doing so. Giving the company a sales tax exemption (for only five years, not in perpetuity, by the way) would have put more than 1,200 people back to work — in Gov. Nikki Haley’s home county — and represented an estimated $100 million investment in our state.
Haley is on record as opposed to the deal, one brokered by her predecessor, Mark Sanford, and Joe Taylor, former director of the state Commerce Department, but said she would allow it to go into law without her signature if lawmakers approved the proposal.
Alas, lawmakers fell prey to pressure from small merchants organized by national retailers and Tea Party activists. There was also public pressure from Haley, who, during an appearance in Aiken, called the incentive “a slap in the face to every small business we have.”
We are on record as supporters of small business. In editorial after editorial over almost a dozen years, we’ve encouraged people to shop locally, to deal with people they know, to find that special item here instead of online or out of town. But here we must point out an incredible irony: According to numerous reports, it was Wal-Mart that convinced smaller business owners to join them in opposition to the proposal. And after all those years of hearing some of these same small business owners say that Wal-Mart, like other big-box, one-stop shopping giants, would run them out of business, the opposition made for some strange bedfellows indeed.
We’ve covered this issue repeatedly, and favored South Carolina keeping its word, although giving more careful consideration to any future deals of this kind. Incentives are a fact of life and if we don’t give them, some other county or state will. And Amazon had numerous incentives over and above even a limited-term exemption from collecting state sales tax.
But Amazon is not the only company that doesn’t collect state sales tax. Federal law doesn’t require that any online retailers collect it from their customers and forward it to the state. And until that issue is settled nationwide (which, for the record, we believe it should be, with online retailers not getting that advantage over brick-and-mortar operations), paying sales tax is still the purchaser’s legal obligation, not the seller’s.
So here’s where we stand: Amazon is pulling up stakes. More than 1,200 much-needed jobs will go to another state and millions of dollars in payrolls, construction contracts and other benefits that go along with a new player in the state will be collected by some other state government.
It’s not like online shopping is a new phenomenon that will take over the entire market of shoppers. The people who shop at Amazon and other online retailers instead of their local stores will continue to do so. Whether they do it for no sales tax or pure convenience or a wider range of choices, they will keep the same shopping habits. The people who, like us, prefer to support local retailers, will continue to do so.
So what have we gained?
It’s hard to see the upside to this supposed victory for South Carolina.
http://www.independentmail.com/news/2011/may/02/what-did-state-gain-saying-no-amazon/?print=1***********
I can't even blame the tea bag gubna since she would have let it pass. I seldom agree with everything in an editorial but this is one. I can only imagine that it had more to do with one party showing the other whose thing was bigger. It makes absolutely no sense for this state to reject Amazon based on the reason's given. I'm for keeping online shopping the way it is, tax free although some of the shipping claims are ridiculous at times.
But I can understand some people wanting that changed however, today, it is the way it is. Do you think that part of it could be that some in this state are so antiquated and out dated in their thinking that they just don't understand or use the new fangled internets...Could they actually be so stupid that they don't see that what they did was cutting off their nose to spite their face.
