Amazon.com: The bigger picture

Today the Greater Lexington Chamber and Visitors Center will be holding a press conference to show its support for Amazon.com locating in Lexington County. This is certainly good economic news for that county and for the Midlands. The 1250 full-time jobs Amazon.com says it will create are welcomed.

The South Carolina Small Business Chamber of Commerce is supportive of counties and the state responsibly recruiting big business. However, we are in opposition to the proposed sales tax exemption for Amazon.com that would give it an unfair competitive advantage over other South Carolina small businesses.

In addition to the small-business fairness issue, the following points also need to be made:

1. This is not an either/or situation. Amazon.com has never made a public statement that it will not build a distribution center if it does not receive a sales tax exemption. Until that happens we must assume that all the other incentives being provided (but not listed in the press conference announcement) such as $4 million in free land, $3200 state tax credit for every worker hired, reduced property tax, no corporate income tax and probably others are sufficient for Amazon.com to keep its plans to build.

2. If economic development officials have been told by Amazon.com that it will not build if it does not receive a sales tax exemption, then they need to tell the public and explain why they are willing to encourage shoppers to purchase from a big business with deep pockets at the expense of our struggling small businesses.

3. An Amazon.com distribution center is not necessarily going to be a long-time employer in Lexington County. This is not a corporate headquarters setting up community roots. The facility is not a manufacturing plant like Michelin that will have decades of use and a skilled labor force thus tying the corporation to the area for many years to come. While a distribution center is nice, it can be replicated in any state once the immediate benefits (incentives) have been exhausted.

4. The issue of internet sales tax is a federal and state issue. Yes, as noted in the aforementioned press release, Congress can change the law concerning internet sales to require “all retailers to collect sales taxes”. But the states, such as South Carolina, can and have passed laws also pertaining to internet sales. South Carolina does not have to wait until Congress acts to protect its sales tax revenue the best it can. In fact, it has passed a law to do just that, which is why Amazon.com is seeking an exemption.

5. In the paragraph above, the word retailers is used by sales-tax exemption proponents in the reference to actions Congress can take that would impact on Amazon.com’s sales tax responsibilities. This is an affirmation that Amazon.com is a retailer and by definition of South Carolina law it is responsible for collecting sales tax. If Amazon.com believes that it is truly not a retail operation then it should challenge the state in court instead of seeking an exemption, which is an admission of its retail status.

6. If the incentives offered to Amazon.com only came from Lexington County taxpayers, The South Carolina Small Business Chamber of Commerce might not have a position. However, this is not just a local issue. It is one that impacts every small business and taxpayer in the state. While the immediate economic benefits will be to the West Columbia and Cayce communities including some small businesses, the sales tax exemption will be paid for by every small business (brick and mortar and otherwise) in the state that will lose a sale because Amazon.com can charge 6 percent less if it does not have to add a sales tax. It will be paid for by every parent in the state that will have less state funds going to their child’s school because a sales tax is not be collected (and most likely not being reported by the internet purchaser). It will be paid for by South Carolinians from Seneca to Bluffton. This is a statewide issue of significant importance to every small business and citizen.

The South Carolina Small Business Chamber of Commerce encourages Amazon.com to drop its demand for a sales tax exemption, declare victory for all the other incentives it is receiving and deliver on its promise of economic development for Lexington County.