House passes Amazon sales tax break, retailer ups job count
Wed, 18 May 2011 14:48:28 GMT —
COLUMBIA (WACH, AP) -- The South Carolina House passed a bill Wednesday giving Amazon.com the sales tax exemption it sought to come to the state.
House members took the 97-20 do-over vote Wednesday afternoon. The vote came three weeks after the House rejected the deal 71-47.
Local officials were pleasantly surprised by the decision.
"I have got tears in my eyes," says Lexington Mayor Randy Halfacre. "It's a great day for South Carolina."
"I am ecstatic," says Lexington County Councilman Bill Banning. "What else could I be?"
The deal negotiated under former Gov. Mark Sanford would give the online retailer a five-year exemption from collecting sales taxes from online shoppers in South Carolina. In exchange, the company must create at least 1,249 full-time jobs with full health benefits and invest at least $90 million.
Amazon does not currently collect the tax from South Carolina shoppers, but putting a facility in the state would normally require the tax.
The bill still must pass through the Senate.
"Clearly it will be debated and it should be debated," states Sen. Nikki Setzler, D-Lexington.
However, Setzler believes the measure will likely pass when the Senate takes up the bill next week..
House leaders say Amazon.com has upped the ante in its quest to get a sales tax exemption approved by the Legislature.
House Majority Leader Kenny Bingham said Wednesday the online retailer is pledging to create at least 2,000 full-time jobs with health benefits and invest at least $125 million. That's up from the 1,250 jobs and $90 million investment previously promised.
"It was a recommendation that was made by the Department of Commerce under the former administration and we need to honor that deal as the State of South Carolina," Bingham adds. "We did not commit to it, but we felt like our word and our integrity was at stake."
Gov. Nikki Haley said the sweetened deal does not change her opposition.
Haley and tea party activists who oppose the deal say it's not fair to existing retailers. Haley says she's focused on keeping a fair market in our state and keeping the companies that are here happy. However, she says she wouldn't veto the bill if passed.Related Stories... Amazon tax break debated outside State House Cayce leaders urging residents to contact lawmakers about Amazon deal Haley makes third big SC jobs announcement after losing Amazon
Rep. Bingham says many legislators asked him to try the bill again. The Republican from Lexington County says some legislators who voted against the deal thought the Seattle-based company was bluffing.
"It obvious to me that dubious last-minute promises influenced some legislators to flip-flop on the vote, says Brian Flynn with the South Carolina Alliance for Main Street Fairness.
Since the announcement that the deal would be reconsidered, the group has revived its campaign to urge lawmakers to block the tax break. The group, backed by hundreds of businesses, including Wal-Mart, originally launched the campaign during the first debate. Click here to see their new ad.
Amazon also pulled out of plans for a Texas expansion over the same sales tax debate. They're considering the same in Tennessee. However, the company announced Monday it is building a new distribution center in Indiana this summer. Indiana does not require Amazon to collect state sales tax on in-state purchases.
"The issue really is an interstate commerce issue," Halfacre explains. "It's really an issue that needs to be dealt with by Congress. Unfortunately, it's bringing about a lot of controversy."
Since Amazon made the decision not to come to South Carolina, Haley has announced three major additions of jobs including a Lexington County Michelin expansion, opening of new Wal-Mart stores across the state and an organic food manufacturer bringing a plant to the Upstate.
With the need for jobs in today's economy, should state leaders allow a tax break to encourage companies to bring jobs to the area? Vote in our poll and leave a comment below to weigh in.
(The Associated Press contributed to this report.)