Fight for Amazon tax break heats up

May 17, 2011 

Midlands political and business leaders intensified their effort Monday to revive a sales-tax collection exemption that Amazon wants to open a distribution center near Cayce.

Backers are lining up a blitz of endorsements from business groups and elected leaders, including U.S. Rep. Joe Wilson, a Republican from West Columbia. Their message: The promise of 1,249 new jobs should override complaints that the tax break is unfair to other merchants.

The state House could vote again on a five-year exemption from collecting taxes on sales to S.C. residents as early as Wednesday.

Meanwhile, a coalition of local merchants and national chains fired a new barrage of radio ads attacking the proposal as a sweetheart deal for the online retailer.

Source: The (Columbia) State

When the issue of a sales-tax exemption for an online retailer's distribution center was before the S.C. House six years ago, the tax break sailed through -- passing 93-1.

Among the tax break's supporters then were now-Gov. Nikki Haley and 31 other current House members. All 32 voted in favor of a tax break for the as-seen-on-TV retailer QVC in 2005 but now oppose granting the same exemption to Amazon.

Amazon requested the incentive -- which would exempt the company from collecting sales tax on purchases by S.C. residents for five years -- as part of a deal to bring 1,250 jobs to a new Cayce distribution center.

The Amazon deal was struck under Gov. Mark Sanford, who since has left office. Gov. Haley has said the exemption is bad policy and refused to support it.

Amid pressure from a coalition of major retailers, including Walmart and Target, and local stores, the House voted down the Amazon exemption, 71-47, on April 27.

The full Senate has yet to vote on the Amazon bill.

House lawmakers expect to vote on the incentive again this week. However, for the tax break to pass, dozens of lawmakers will need to switch their vote -- some for the second time since 2005, Amazon supporters note.

What's changed between 2005 and now?

Haley spokesman Rob Godfrey did not directly answer why Haley has changed her mind on the tax break since her 2005 vote. But, Godfrey said, the governor opposes government "picking winners and losers."

"... So while if the legislature passes this bill, she will not veto it, the governor cannot and will not say that it is good policy -- she doesn't believe it," he said.

House Majority Leader Kenny Bingham, R-Lexington, said gubernatorial support was the biggest difference between the 2005 and 2011 votes.

Rep. Ralph Norman, R-York, who voted in favor of QVC in 2005, said the economic climate is different.

"Back in '05, South Carolina had money," he said.

Some Democrats, too, say they too are tired of offering tax incentives to businesses, particularly in light of plunging state tax revenues, which have led to three years of cuts to state spending on education, colleges and social services.

Other legislators, however, say they are having second thoughts.

Rep. Murrill Smith, R-Sumter, voted for QVC and against Amazon. But, he added, local economic-development officials have him concerned that voting against Amazon again could hurt future job-recruitment efforts.

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