This came in a few hours ago, and I just saw it:
SC MADE NO PROMISES TO AMAZON
Issue Is About Basic Fairness To SC Citizens & Businesses
FOR IMMEDIATE RELEASE CONTACT: Brian Flynn
April 5, 2011
Columbia, SC– The state government agency that cut a controversial sales tax deal with Amazon.com admits that no promises were made to the online-only retail giant.
“We can’t make a promise,” Commerce Department spokeswoman Kara Borie told The State newspaper on Thursday regarding the deal, which was crafted to lure the company to South Carolina.
South Carolina’s agreement with Amazon only states that the Commerce Department would “use its good faith, best efforts” to persuade the legislature to exempt Amazon from sales taxes. The agreement even maintains that the chances of such an exemption would also depend on available resources.
The South Carolina Alliance for Main Street Fairness (SCAMSF) – a statewide group representing brick-and-mortar retailers – argues the deal is unfair to other business in the state and will likely cost thousands of jobs and millions of dollars in lost revenue. The group said the state has more than lived up to its “good faith” commitment to Amazon.
“This is an issue of basic fairness. Amazon should not be able to receive a deal that provides it a competitive advantage over South Carolina businesses,” said Brian Flynn, spokesperson for the South Carolina Alliance for Main Street Fairness (SCAMSF). “Furthermore, it is clear Amazon was not promised anything; instead, the online-only retailer is trying to bully our state into giving them an unfair advantage over other retailers.”
Added Flynn, “Not only will South Carolina businesses be negatively impacted by this special deal, but South Carolina consumers will continue to be held liable for unmet tax obligations due to the fact that Amazon refuses to collect the sales tax and places the burden on its customers. Elected leaders in Columbia should stand with their constituents and employers and oppose a special handout to Amazon that will end up costing us more jobs than it creates.”
SCAMSF also noted Amazon signed the deal knowing there were no guarantees that a sales tax exemption would be included. South Carolina currently is experiencing a budget shortfall that is $700 million.
The South Carolina Alliance for Main Street Fairness (SCAMSF) is a statewide organization representing brick-and-mortar retailers that collect sales taxes and are committed to a fair and equitable sales tax system that eliminates the competitive tax advantage granted to certain online-only retailers.
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I gave the contact, Brian Flynn, a call after I read it, mainly to find out who the South Carolina Alliance for Main Street Fairness might be. He said it was a brand-new chapter (formed in response to the Amazon issue) of a national organization, Stand with Main Street. The point is to fight the tax advantage that online businesses enjoy over real brick-and-mortar businesses here in our communities.
Brian says he is calling himself the executive director, and is paid by retailers, from Mom and Pops to big boxes. I asked him what else he did for a living, and he said he’d just returned from Afghanistan. He’s an intelligence officer with the National Guard — 178th Field Artillery.
I thanked him for his service.
He says while this is the first issue the new organization has worked on, he hopes to see a “fairness” bill introduced in the Legislature later.
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Something indicates Vincent Sheheen’s firm has been contacted to lobby for the SCAM for Main Street Fairness.
Would that have to be disclosed before he could vote on, much less co-sponsor, a “fairness” bill to be introduced in the Legislature later? Lawyer transparency is quite a myth.
I am not clear on how Amazon locating here and getting this exemption is going to cause a new loss of jobs to local brick and mortar businesses. Won’t it just be a continuation of the current situation. I would think if Amazon was made to collect the tax – then maybe main street businesses in SC would get a bump, but I don’t see how them locating here with the exemption would cause a new hit to businesses that is not already happening. People are already ordering from Amazon. The distribution center being located here is not going to cause local people to suddenly order more from Amazon than they already are….I don’t think. Am I missing something?
He makes a good point; if you buy from an online retailer who doesn’t collect sales tax, isn’t the purchaser responsible for it? Let ’em come, then make them turn over their list of SC purchasers. DOR would love that.
Of course I might feel differently if they were cutting deals to put businesses in poor counties like mine.
Oh, that’s right, no industry wants to move into the poor counties because the schools are so bad, partially becuase there’s no industry to pump up the tax base and keep people living here with good jobs.
The circle goes unbroken.
Juan, what’s the “something” that “indicates” that to you? The Guard connection? By the way, I wasn’t aware that firm lobbied, but I don’t know one way or the other. Not that there would be anything wrong with that if it did; I’m just not aware that it does.
Scout, you’re missing a couple of things. First, that every online transaction should be taxed. It’s absurd that consumers should be given a tax break to encourage them to run the businesses run by their neighbors out of business.
Second, the U.S. Supreme Court has ruled that businesses with a physical presence in the state must collect the tax. This is a bogus dividing line, and a harmful one when it comes to economic development. It penalizes a web business for creating jobs in SC. If Amazon leaves, it will be as much because of that position taken by the court as anything else. Of course, ecodevo in SC is not the court’s concern; the law is. That’s why the law should be written, and enforced, requiring anyone who makes a sale in any state to collect that jurisdiction’s tax.
And please, don’t tell me that would be a burden on that business. They have no problem tracking everything about the customer and his/her shopping preferences, so writing it into the code to automatically tax according to jurisdiction should be no problem. Amazon can handle it.
Yes, Brad, but every online transaction ISN’T taxed. So the result of not granting the exemption is merely that Amazon will take its nice jobs elsewhere.
The “nexus” thing is more important than you might think– I did a survey of the laws of the 50 states back when I was a baby lawyer because the cost and other burdens of “qualifying to do business as a foreign corporation” for many corporations would be huge, and a burden on interstate commerce. The Supremes had to draw the line somewhere–how much business is “doing business” sufficient to render a corporation subject to all the rules and regulations of a state? What would happen if the nexus test is abandoned is that many corporations would do like they do for sweepstakes, and refuse to do business with residents of the peanut states like SC, and concentrate their activities in high payoff states. Net result: the consumers of SC lose, just like the potential employees of Amazon are going to lose.
Scout is right: if I am going to shop on Amazon, I was never going to buy from “Main Street.”
First, the fact that every online transaction isn’t taxes is something to FIX, not something to be used as an excuse for a bad policy.
Second… I don’t follow your reasoning on the nexus thing.
What I want, since this is a SCOTUS thing, is a national solution. And online businesses aren’t going to stop doing business with the world’s largest economy because of the minor, tiny, inconsiderable irritant of having to collect a tax.
And South Carolina isn’t a “peanut” state. North Dakota — now there’s a peanut state for you. Or Vermont. Or Wyoming.
Ranked by population, we’re right smack in the middle — in fact, between the 2000 and 2010 censuses, we moved from the bottom half to the top, from 26th to 24th.
We’re middling.
We’re only a peanut state if you think of California, New York, Texas and the other four in the exclusive over 10 million club as the “real” states and the rest as dinky and inconsequential. Which would be a kind of snobbery every bit as offensive as Sarah Palin’s yammering about “real America.”
Of course, maybe you were speaking literally. In which case, yes, we grow peanuts here. But we’re not as identified with it as Georgia is…
I’ll take ND over SC anyday? Aren’t they the only state in the union with a surplus budget? Their legislature also only meets every other year, I’m guessing because when they’re in session they actually accomplish things at the end of every day.
SC is the land of unskilled/cheap labor and poor education. Anyone who thinks things will change in the next 100 years is just fooling themselves.
Damn no editing features on this blog…
“I’ll take ND over SC anyday.”
I can explain further on the “nexus” thing, but it would take more typing than I’m up for. It’s part of the whole “corporation as person” legal fiction. Suffice it to say that the overhead for corporations is not trivial when it comes to “doing business” in a state.
*I* don’t think SC is a trivial state, but lots of businesses do–we already lack several desirable merchants. For an Amazon, we are probably worth doind some paperwork, but for businesses that only make the most casual sales or provide only occasional services, we would not be worth the trouble that a bigger state would be.