Well, I’ve gotten my hands on audio of that radio ad I was wondering about last week from the friends of Amazon — and a second one as well. Here’s audio for the first ad, along with the script:
In the elections, politicians promised jobs.
When Amazon announced plans for a distribution facility in Lexington County, it meant 12-hundred and fifty full-time jobs and hundreds of part-time jobs.
Not only that, but millions of tax dollars for our schools.
South Carolina promised Amazon it would work to make this happen.
But Wal-Mart and other retail giants are trying to force the state to break its promise and make Amazon collect taxes from South Carolina customers. The courts say that’s wrong. If Walmart gets its way, Amazon has said that it would have no choice but to leave.
This isn’t about online sales taxes. That’s for Congress to decide.
It’s about paychecks and healthcare benefits families. Property taxes for schools. And purchasing power for small business.
Call your legislator and Governor Haley now. Ask them to keep South Carolina’s promise to Amazon by extending the Job Creation Act. Say yes to jobs. No to Wal-Mart.
And here’s audio for the second, and that script as well:
The Upstate has BMW and the Low Country Boeing.
Now it’s our turn with Amazon.
Forbes calls Amazon the number one company in America for customer service.
Fortune listed Amazon as one of the world’s most admired companies.
We NEED one of America’s best companies working with one of America’s best regions to grow and prosper.
Call your legislators and Governor Haley. Tell them to pass the Amazon bill because 1200 jobs with benefits are exactly what we need.
Paid for by Save Our Lexington Jobs.
As you see from that first item, a large part of the case being made is that the opposition is Walmart. And indeed, it is a big liability for opponents of Amazon getting the break it seeks — and a huge irony as well. The anti-break faction paints itself as being all about “main street” — and we all know that Walmart has done more to hurt ol’ Mom and Pop than anyone. Which is why that side is quick to point to local business allies.
Both sides are playing on emotion, of course — fairness vs. mean ol’ Walmart. That’s because this is a political battle.
Which is why one seems out of place when one cites dry policy justifications, as my friends at The State did. They were right, of course: we need to be moving TOWARD collecting taxes on online purchases, not away from it. That’s the big picture. Unfortunately, when you’re looking at that many anticipated jobs going away, that “big picture” can seem awfully abstract.
That’s why I get somewhat uncomfortable defending the position that is, in the abstract, completely right. Like when I was talking with Mike Briggs of the Central SC Alliance this morning at breakfast.
To Mike, Amazon was promised this break — which is really about reinstituting a break that existed in state law before. To me, the idea that anyone could consider anything that depended upon action by the SC General Assembly as a promise seems far-fetched. Perhaps legislatures act more predictably in other states where Amazon does business, but they certainly don’t here. A “promise” made by Mark Sanford (who’s he?) to TRY to get something enacted hardly seems binding on anyone currently in office. YES, it could indeed make the job of economic development in the future harder, to the extent that other prospects also see this as having been a promise. But do you really do something you think is bad policy because of that? Maybe you do, if you need the jobs badly enough…
Mike’s stronger point is that this distribution center is hardly the kind of “nexus” that was anticipated in the case that set national precedent on whether businesses were required to collect such taxes. He argues that it was about storefronts, not about administrative facilities. He may be right.
My response is that what we need is national law that would require Web businesses to collect sales taxes regardless of whether they have a local precedent. Web businesses have enough of a competitive advantage over bricks-and-mortar businesses that provide jobs (and, ahem, buy advertising) in our local communities. Government should not allow them another.
Yeah, I get it — that’s NOT the law now. But apparently, current law DOES hold that Amazon would have to collect the taxes once its facility is built. And granting a specific break to Amazon on this would be a move in the direction AWAY from the kind of law we should have, nationally.
Yeah, I know. Such dry policy considerations about laws we OUGHT to have are cold comfort to someone who was counting on getting a job at Amazon. And I respect that.
Which is why I’m trying to give as much exposure as I can to the pro-Amazon argument. So my readers have all the ammo they need to disagree with me, if they are so inclined. Hey, I try to do that all the time, but in this case I feel particularly obliged.
In that spirit, I call your attention to one other item from the pro-Amazon campaign — this op-ed piece in the Charleston paper, by Lewis F. Gossett, president and CEO of the South Carolina Manufacturers Alliance. An excerpt:
Debate about extending the Jobs Creation Act for Amazon goes far beyond the Midlands, which stands to gain 1,200 full-time jobs with benefits, hundreds of seasonal jobs, and economic investment nearing $100 million.
How the General Assembly and governor handle this project will affect every county’s ability to compete in the global economy for jobs and investment. If they fail to simply extend a tax provision that has existed for five years, leaving Amazon no choice but to go somewhere else, every state in the nation will have the same message for job creators large and small: If South Carolina will break its word to a world-class company like Amazon, it will do it to you.
Decades of work to make us a global player, from Carroll Campbell to Gov. Haley, and heroic efforts by the General Assembly to make our laws business-friendly will be compromised by a broken promise.
Make no mistake, the outgoing administration promised Amazon reinstatement of a just-expired law that did not require online retailers to collect sales taxes from South Carolina customers. Secretary of Commerce Robert M. Hitt has said so.
Detractors can parse language in the formal agreement all they want, but the fact is that every major deal between the state and private companies contains a lot of formal language, as well as verbal agreements and handshakes. Company officials from well-publicized large projects in the Upstate and in the Charleston area also trusted state leaders to get incentive packages approved by governments at all levels. And it is true for Amazon…
It’s a tough issue. And I find myself on the less-comfortable side of it.
Related Posts
If you really want to fix the sales tax loophole, you institute a consumption tax payable by the taxpayer as part of the income tax. Of course, all those sales tax exemptions would go by the wayside–you’d have to pay tax on ALL your new BMW< not just the first $6K of it, for example.
It's the nexus thing. I keep telling you that there are more Mom and Pop online sellers (on etsy, for one) than there are Mom and Pop bricks-and-mortar stores. Are we going to make them collect, and remit, sales tax? If they don't, then what, especially if they collect and don't remit.
There are several things about the anti-Amazon position that bother me. One, proponents of not giving the exemption I think are either operating under a misunderstanding or, worse, intentionally spreading misinformation, when they insinuate that giving Amazon this exemption will be a change from the current situation, and also insinuating that by not giving the exemption, we can actually affect some kind of change in the tax situation. Two, anti-amazon proponents also make out like giving the exemption will cause loss of jobs to local retailers, but the exemption is the status quo. It will not be a change. Any impact Amazon not collecting sales tax from South Carolinians has on local retailers is already happening. Nothing about having the distribution center here (with the exemption) will change what already happens when a South Carolinian orders something from Amazon. So I fail to see how giving them the exemption will cause a NEW loss of jobs for local retailers, as their ads suggest.
It also bothers me that absolutely nobody is making an effort to explain that South Carolinians are supposed to pay use tax on these purchases anyway – which if they were educated and did actually pay this tax – the whole point would become moot anyway.
I agree that we need to move towards having online retailers collect sales tax. I just don’t see how anything about the anti-amazon position achieves that or changes the status quo in any way. I don’t think there is a way to change it outside of a national solution. The only thing I can see that the anti-amazon position does achieve is the loss of the jobs and economic impact.
BTW, I know Mike Briggs. He is a good guy.
I am for Amazon coming to the Midlands and hiring.
However, I have a problem with the second ad. Both BMW and Boeing are manufacturers; they create and build stuff, in this example cars and planes. Amazon is just a distribution center; they don’t make anything. Stuff comes in and gets shipped out to different directions. It’s like the UPS hub that Columbia has, the Walmart distribution center in the Upstate or QVC in Florence. Neither Walmart, QVC, or Amazon are manufacturing anything.
Would BMW have come to SC without the ridiculous $300 cap on auto sales tax? Hmmm?
One for your Daily post.
http://www.dailygamecock.com/news/item/1384-usc-awards-more-than-$27-million-in-salary-raises-while-cutting-jobs-freezing-hiring
Amazon, like QVC, will have a distribution warehouse in South Carolina.
If I use what I consider twisted logic from opponents, then, if we have distribution centers for any retailer, then we should be collecting sales tax on everything that passes through their doors.
So, UPS should start identifying what is in each package and assigning the appropriate tax to its contents.
Great recruiting tool for the state, don’t you think?
@ scout– well said. Thing is, I just bought some stuff on etsy for my mom for Mother’s Day–supporting small artisans. Do we really want to burden some candymaker in Vancouver with collecting sales tax and remitting it to my state? I believe more small businesses sell on the ‘net than don’t–it’s a low overhead way to get off the ground. Making small businesses collect for sales out of state would hurt them far more than it will help them!
I have to point out that UPS is not the same as Walmart or QVC. UPS is not a retailer — it merely provides transportation for a fee. Walmart, QVC (and Amazon) are actually retailers — they sell stuff. UPS just ships it (unless what you’re buying is a box, in which case, they charge sales tax).
Kathryn,
It’s not about selling on the internet, it’s about selling from SC to SC residents.
This state moved away from a property tax weighted tax system to a sales tax weighted system. So exempting Amazon is a real problem, and a slippery slope.
I disagree with Scout on this; the situation will not be as it was – Amazon will now have a physical presence here that sells to us. All things considered, Amazon would rather pay sales tax on internal SC sales than on sales in GA, NC, FL, VA, etc.
It’s still a game for them; how much can they get us to give them? Amazon has committed. Let’s welcome them. But let’s not convince ourselves our “honor” is at stake if we don’t screw ourselves. Or that Amazon did not fully understand that the previous exemption was expiring and likely not going to be reinstated because it was proven to be bad policy.
But Mark–they don’t have a physical presence in the sense that I can go in and buy something. They just happen to be trans-shipping in-state.
There are places I can go to buy something now, and places I order and wait for delivery. Amazon is solely in the second category. Walmart and Best Buy are in the first and the second, except that I never buy from them in the second category–Amazon has better selection, prices, and with Prime, shipping terms.I’m still going to buy what I buy from Amazon whether or not I pay sales tax.
The real question is, as scout says, whether we get the jobs or a more accommodating state that understands “nexus” does.
@juan, it might have made a difference if BMW’s intent was to sell all the output from that factory in SC.
As it stands, 70% of that output goes overseas. http://money.cnn.com/2010/10/14/news/companies/BMW_South_Carolina_exports.fortune/index.htm
Not a physical presence in the sense that I can go there and buy something.
Kathryn, I respect your concerns for small internet retailers if we moved to some kind of national requirement for internet retailers to collect state sales tax. I would hope there would be some kind of plan worked out that would respect the little guy – maybe there could be a threshold of level of business you’d have to reach before you had to collect the tax. What if small retailers just had to include a statement on their invoices advising people that they might owe state use tax and giving a web address that contained links to all states use tax policies. That would be a start. Seems like with the potential for automated accounting software these days, that something manageable could be worked out.
But Mark, how will the distribution center being here change the process from what happens right now when a South Carolinian orders from Amazon. The item they order is not necessarily going to come from the SC center, I don’t think. I suspect it may or may not, depending on what the specific item is. It probably is a game to them, but I think there is enough evidence to take them seriously when they say they will leave rather than collect the tax.
Just suppose they are serious about leaving. In that case, we have two options – Amazon is not here and does not collect the tax, or Amazon is here and does not collect the tax. Which is better for our economy?
There is a threshold now–they don’t have to collect tax unless they have a “sufficient physical presence” a/k/a “nexus.” Some states, that excludes a distribution center–SC used to, as well. That exclusion expired.
Amazon will not have an actual store here where I can go buy products. It’s just a distribution and maybe call center.
It appears that the legislators from Lexington are not behind this. Their constituents must have employment. I wish Amazon would come to Lancaster or Chester counties. We have hundreds of people with experience from Springs customer service who are unemployed. We have a large customer service facility that is vacant. We desperately need the jobs. Hopefully our representatives would fight for this. I think the legislature should follow the lead of the Lexington representatives. If Lexington does not need the jobs, why should SC forgo the taxes?
Scout,
It’s not that I disagree; it’s just that in my professional experience companies like Amazon nail down what they must have before they commit. Then they play for the “wants”. I do not agree with the characterization from the pro-deal people that SC has not lived up to its “promises” – that’s clearly bunk. States, and companies, have been known to not live up to their promises, but if that were the case here the documents would have been produced or Amazon would have trumpeted that a hand-shake deal had been trashed. They aren’t doing that; instead they have let citizen be pitted against citizen to see what extra goodies can be extracted from our own insecurities. I’ll wager on that hand any day. Amazon will stay.
Frankly, if they go they really won’t be missed all that much anyway. Despite what the supporter’s say an Amazon facility is nothing like a manufacturing (Michelin) or intellectual property (Blue Cross Blue Shield) entity. The spin-off benefits to the region are nowhere close to being the same. I’m not knocking Amazon’s arrival by any means; I just think we need to keep it in context.
Yes, Amazon plays hardball. Jeff Bezos is a former Wall Street quant jock. Amazon plays for keeps. But notice the two states they pulled out of were Texas and Illinois, both high population states. The SC sales tax burden is not even a marginal cost to Amazon. But to the state of SC, those sales taxes – and the precedence they set – make a real difference.
Kathryn,
The nexus agruement cuts against your position, I think. In the old world where distribution centers simply supported retail stores your position is one that I would agree with. However, with retail internet sales the situation is completely different. Now the consumer’s computer or smartphone is the retail facade. The distribution center is no longer one step in a chain; now, it is now a fulfillment center shipping to the end-user. That’s a retail transaction, whether you can walk in a front door or not. That’s a nexus.
Other distribution centers that support physical stores do not met the nexus threshold. However, if they do ship directly to consumer’s as a result of an internet transaction, then those sales ought to be taxed too.
We ought to just have a consumption tax, if that’s what we’re trying to tax–AGI minus savings = Consumption
–includes services and all those OTHER exemptions Walmart doesn’t care to attack….
http://www.sctax.org/Publications/Sc+Sales+Tax+Manual09.htm
So Amazon has bailed after the house vote went down in flames…and they give up a $52 million facility to protest a tax break estimated at $2.5 million a year over 5 yrs. The question is who is the greater fool? I say Amazon. They have proven themselves to be tone deaf to say the least.
If Amazon gets over its hissy-fit of amateurism, the company should know they’ll still be welcomed – Just like every other company.