Just as we're gearing up for a nationwide argument over taxes that will likely include a lengthy debate over the extent to which they kill job creation efforts, up pops Amazon to further muddy the waters.
Several of the online retailer's big box rivals launched a high-profile campaign recently pointing out that Amazon is exempt from sales taxes in most states. The reason for that—in most cases—is that the company maintains no physical presence in most of the states it does business in, thereby exempting it from state sales taxes.
However, the company also seeks exemptions from those taxes in states where it does maintain a presence—as became evident when the firm "immediately halted plans to equip and staff [a] one million-square-foot building under construction" in South Carolina, after state legislators refused just such an exemption for the firm.
The result: the company has "canceled $52 million in procurement contracts and removed all South Carolina fulfillment center job postings from our (Web) site," according to a company spokesperson cited in The State.
At a time when South Carolina is struggling with an unemployment rate of 9.6 percent, the 1,249 jobs the delivery center was set to provide would undoubtedly have been a welcome relief. Instead, the center will likely be finished and then "put into mothballs."
The issue raises—yet again—the question of how much job creation is actually worth to states. Clearly South Carolina has drawn its line in the sand; while estimates suggest that cutting the deal would have netted state and local authorities $11 million after the $2.5 million exemption, the center was also built on a free site, and came with other tax breaks, credits and even changes to local laws.
Where Amazon goes from here is uncertain. But wherever it is, state legislators have some calculating to do: how much are you willing to give up to land those jobs?
The State: Amazon packing after House vote
--Phil Stott, Vault.com