April 4, 2011

Amazon threatens retaliation against South Carolina if it has to obey state sales tax laws

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Add South Carolina to the long list of states (including Arkansas, Arizona, California, Indiana, Massachusetts, Minnesota, Texas, Utah, and Vermont) where leading newspapers are urging lawmakers to get Amazon to collect sales taxes just like brick-and-mortar retailer have to.

And add South Carolina, too, to the long list of states (including Arkansas, Arizona, California, Indiana, Massachusetts, Minnesota, Texas, Utah, and Vermont) that Amazon has threatened with retaliation if it passes or enforces laws making it collect those sales taxes.

As an editorial in the state’s largest-circulation newspaper, The State, notes, South Carolina has already made numerous concessions to Amazon in an effort to get the company to open a distribution center there that would mean 1200 new jobs. According to the editorial,

That’s why we agreed to give Amazon a $4 million piece of land for its distribution center, to reduce its state taxes by up to $3,250 a year for every job it creates and to slash its property tax assessment from 10.5 percent to 6 percent. That’s why the Lexington County Council ignored local protests and forever changed the community’s cultural mores by lifting the Sunday sales restrictions that would have made it impossible for the online retail giant to ship out products 24/7.

But Amazon has also threatened to pull the center from the state if it is not given an exemption from state sales tax laws. And, continues the State‘s editorial,

… you have to draw a line somewhere, to identify a price you can’t pay to buy new jobs. Amazon’s request for a significant competitive advantage over our locally owned businesses, as well as Walmart, Best Buy, Lowe’s and all of its other big online competitors — companies that employ tens of thousands of South Carolinians — crosses that line.

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives

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