May 2 2011
Over the last several days, I have received many calls and emails concerning the Amazon vote. Some were in favor of the vote I took, some were opposed.
Although it’s often difficult to explain a complicated matter in a letter or an email, I am going to attempt to do so with this email. If you have additional questions, please feel free to call me at 940-1696. I am your representative and I am always happy to talk with you.
The Amazon bill was not an easy issue. I did not sleep for three nights, just wrestling with this issue. In all honesty, I would have liked to have had more information. However below is the information I had, which you may or may not have read or heard about in the media.
I have heard many say that SC made a deal with Amazon and we should honor that deal. We did honor our deal. The Amazon package included free land to build their facility, reduction in property taxes, job tax credits and the elimination of Sunday blue laws. The “elimination of sales tax deal for five years” is a memo from the Commerce Department stating it would “make its best efforts” to secure the legislature’s approval for the elimination of the sales tax.
Amazon is a $9.86 billion company with high-priced lawyers working for them. They began construction on this facility knowing the elimination of the sales tax had not been approved. This was not an oversight!!
Currently Amazon is in a legal battle with Texas. Texas gave Amazon a 5 year break in taxes, similar to their request of SC. The five years has ended and this year they owed the state of Texas $269 million dollars. They refuse to pay and began threatening to close their facility in Texas. So far, they have not closed the facility and have actually hired more people, but have yet to pay their tax. The SEC is currently investigating this issue.
According to the Seattle Times, this same tactic was tried in Colorado. According to an editorial in the Seattle Times “Amazon reacted with punitive petulance, sending a deliberate message to lawmakers in every other state: Make us play by the same tax rules as other businesses and your state will be punished, too.”
This isn’t something SC has done to Amazon, this is apparently how Amazon does business. Amazon also has a $1.5 billion bill with the IRS for inefficiencies in transfer pricing with foreign subsidies.
With all of these tax issues in other places, it is hard to believe Amazon overlooked the sales tax issue before they began construction. They began construction and they are now forcing the issue to hold us hostage to their demands. From a business standpoint, it is a brilliant move on their part.
As lawmakers, we were besieged with calls from SC businesses who strongly objected to the Amazon tax break. Small business owners who have been in SC for years, providing jobs, paying their taxes and receiving no incentives from the government were upset by the disadvantageous position it placed on their companies. The small business community claimed as many jobs brought by Amazon would be lost across the state due to unfair competition.
The Federal Government is also working on a bill to enforce the collection of taxes by all online retailers. It is the law, taxes are to be collected on items sold.
Hopefully we will be able to work something out with Amazon. Most of my constituents in District 9 own small businesses or work for small businesses. The majority of the calls and emails I received were opposed to giving Amazon the exemption. Particularly in this economy, this was a very difficult decision. As lawmakers, we have to be careful not to give special tax advantages to one company that would disadvantage other companies. Your government should not pick the “winners and losers” in our businesses. This entire debate over Amazon demonstrates the need for tax reform in this state. We need a fair and level playing field so we will not have issues like this one in the future.
Remember if a bill is coming before the House and you are in support or opposition to the bill, you can always call (803)212-6889 and let me know your opinion. I want to know what you are thinking. I am in Columbia to represent you!
As always, I appreciate the opportunity to serve.
Representative Anne Thayer