Several weeks ago the S.C. House voted overwhelmingly against throwing small retailers across the state under the bus in order for Amazon.com to build a distribution center in Lexington County. The rejection of giving the retail giant the unique exemption from collecting sales tax on in-state sales led to Amazon declaring that they would not build the distribution center sending local economic development folks into a panic.
So this week we expect that there will be a second vote on the Amazon sales tax deal.
But now new revelations have come to light further demonstrating why the House should not change its collective mind. These are laid out today in a letter to House members signed by the SC Association of Taxpayers, the SC Small Business Chamber of Commerce, SC Campaign for Liberty and the SC Alliance for Main Street Fairness.
To answer the question of whether Amazon absolutely will not locate in a state if it has to collect sales tax, our letter gives the real facts:
(S)ince the initial vote was taken we have learned that over 50% of Amazon’s revenue comes from locations in which they collect the sales tax. A recent Seattle Times article regarding an SEC inquiry into the company stated, “In an earnings conference call this week, Amazon Chief Financial Officer Tom Szkutak sought to downplay the potential impact if more states put an end to tax-free online sales. He said Amazon generates more than half of its revenue in places where it already collects sales or consumption taxes, including markets outside the U.S.” If that’s the case, why are they so opposed to collecting the sales tax in SC when they have already received such a generous incentive package?
And to the argument that turning Amazon down will hurt recruitment of other businesses, the letter addresses the state’s efforts to lure Sears to the Palmetto State:
(W)hen the potential impact on the recruitment of Sears was offered as evidence, one of Sears’ representatives stated “Sears Holdings Corporation strongly supports the decision by the South Carolina House to stand up for local businesses and not give in to pressure from Amazon who consistently puts protecting its unfair competitive advantage before investing and creating jobs in communities around the country. Any comments that suggest anything other than full support for this effort to level the sales tax collection playing field, regardless of the context, are patently inaccurate.” Clearly, the House denying this special deal has had no adverse impact on recruitment efforts.
Contact your House member and ask him or her to continue to stand with the state’s small retailers by voting NO on the Amazon.com sales tax deal.