Congratulations to the South Carolina House!
Yesterday after nearly two hours of hot debate, Representatives voted not to give Amazon.com an exemption from collecting sales tax on in-state purchases. The vote turned out not to be even close.
A clear bi-partisan majority in the House established a new principle for the state’s big business recruitment efforts—do no harm to our existing small businesses.
That was the underlying problem with the Amazon.com sales tax deal. All month we and other business organizations have been saying that exempting Amazon.com from collecting sales tax would give it an unfair competitive advantage over our existing brick-and-mortar and online businesses. (Check out my WIS-TV editorial that ran yesterday afternoon before and during the floor debate.)
The Amazon.com supporters tried to change the subject to one of honoring our promise to Amazon.com to give them the sales tax deal. But no such contractual promise was ever given to Amazon.com.
In response to yesterday’s vote, Amazon.com announced that it was pulling out of building a distribution center in Lexington County. This could be a ploy to scare the legislature into yet giving in. Or it could be a clear indication that Amazon.com is not the corporate citizen we want here. One that either gets its way 100% or takes off for greener pastures.
If it’s the former, the House should not flinch and the Senate shouldn’t tremble because Amazon.com will eventually keep their contractual promise to build. If it’s the latter, our state will survive without Amazon.com and our ability to recruit business will be just fine. We’ll see Amazon.com in court to recover the tangible property already given to the company as part of the contractual incentive.
Comments reported in The State today from a Lexington County official are clearly over the top predicting that “It’s like no one will even look at coming here for 10 years.” You’d think that Sherman burned Columbia and Lexington again yesterday.
However, at the exact same time some legislators were predicting recruitment impotence yesterday if we turn down Amazon.com’s sweetheart sales tax deal, I received the S.C. Department of Commerce’s weekly e-newsletter, Commerce Communications. (I encourage you to sign up for this well designed, clearly written and informative publication.)
In the last 3 issues of this e-newsletter Commerce has announced six new or expanding businesses planning to invest $53.3 million and creating 568 new jobs in the state. Does anyone really believe that this kind of success is going to come to a grinding halt because Amazon.com couldn’t bully the South Carolina House into dropping our collective pants?
Of course not.
Now attention must be paid to the Senate. Amazon.com hasn’t been paying possibly six digit fees to lobbyists just to give up as long as the legislature still has a breath of life this session.