Amazon considers dumping out of Tenn. deal over lack of tax break
Mon, 09 May 2011 14:58:05 GMT —
COLUMBIA (WACH) -- Just over a week after Amazon announced it was pulling out of a deal to bring a distribution center to Lexington County, the company is running into the same type of roadblock in Tennessee where it has proposed an expansion.
Amazon Vice President Paul Misener said he doesn't expect negotiations with lawmakers to continue over a state sales tax break for the online retailer. Misener made the announcement at the end of April.
Now this week in Tennessee, some state Republican lawmakers are pushing for the internet giant to collect sales tax there as well. Amazon officials say they won't hesitate to drop the plans if a tax break to avoid collecting sales tax from in-state purchases isn't reached.
According to a U.S. Supreme Court ruling, states can't require out-of-state retailers to collect sales tax from in-state customers unless there is a physical store open to the public.Related Stories... Former chamber head criticizes Wal-Mart deal Wal-Mart expanding in SC, bringing 4,000 jobs to state Amazon bails out on plans for Midlands warehouse
The tax break proposal in the Palmetto State that would have given Amazon a five-year exemption from collecting sales taxes from South Carolina shoppers failed in the House with a vote of 71-47. That deal was made under former Gov. Mark Sanford.
The new distribution center would have brought 1,250 jobs and over $100 million in investments to the Midlands.
Supporters have said South Carolina needed to honor the deal made by the Commerce Department under Sanford. They said it would otherwise give the state a reputation of not keeping its commitments, and hurt the state's ability to attract employers in the future.
Gov. Nikki Haley says she's focused on keeping a fair market in our state and keeping the companies that are here happy.
Amazon also pulled out of plans for a Texas expansion over the same sales tax debate. 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," Lexington Mayor Randy Halfacre explains. "It's really an issue that needs to be dealt with by Congress. Unfortunately, it's bringing about a lot of controversey.
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.