Amazon tax break: good or bad?

Construction continues on Amazon distribution center. / Adam Pinsker

LEXINGTON (WACH) -- Lexington County officials say they are forging on with their plan to bring hundreds of new jobs to the Midlands. will open a distribution center off I-77 in 2013, but there is controversy surrounding the incentives package used to draw the online retailer to the state.

The incentive deal protects Amazon from collecting and paying tax on purchases made by South Carolinians, meaning the consumer would be responsible for reporting those purchases.

Former chair of the Lexington Chamber of Commerce Scott Adams says a Supreme Court ruling from nearly 20-years-ago protects Amazon from having to collect sales taxes.

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"If you are an internet sales company and you do not have a retail presence, and the law refers to those locations as a nexus in the state, then you are not required or obligated to remit or collect sales tax," Adams says.

Business and community leaders are standing behind the plan.

"I know small businesses are up in arms because they are concerned about it, but actually, it's going to feed our small businesses," says Lexington Mayor Randy Halfacre.

"The salaries and income that's made in compensation for Amazon employees, it's going to come back to the local economy," the Mayor adds.

But spokesman for the South Carolina Main Street Alliance Brian Flynn says it's not fair that small businesses have to collect sales tax at the point of purchase while Amazon is exempt from doing so.

"Consumers will be held liable if they don't report the sales tax from their online purchases," Flynn explains.

What do you think? Leave your comments below.