Amazon.com has been on a hiring binge, and its need to open more fulfillment centers across the U.S. has been a big factor. But the Seattle ecommerce giant also has been in protracted disputes over uncollected sales taxes in numerous states, from Illinois to Texas to South Carolina.
Those two realities have collided in South Carolina, with potentially devastating results for a community seeking jobs there.
On the heels of a legislative vote in South Carolina that rejected Amazon’s plea for a sales tax collection exemption, Amazon said it won’t open a distribution center in the state, a project that included a one-million-square-foot building already under construction and 1,249 jobs.
“As a result of today’s unfortunate House vote, we’ve canceled $52 million in procurement contracts and removed all South Carolina fulfillment center job postings from our (Web) site,” said Paul Misener, Amazon vice president for global public policy, according to a report on The State newspaper website.
Lexington County Economic Development Director Chuck Whipple has estimated all those jobs would have resulted in an annual payroll of $60 million, according to the Charleston Regional Business Journal.
Amazon’s “our way or the highway” strategy suggests Amazon thinks it will easily find other alternatives to fulfil the company’s needs to open more distribution centers to keep those boxes of goods flowing. Maybe so. But it remains to be seen if this is a sustainable strategy, given the fact that Amazon currently doesn’t collect sales taxes in half the U.S. states.
Amazon this week said it plans to open 11 distribution centers, maybe more, as the company tries to keep up with demand from consumers who have flocked to its website looking for deals on books, music and other merchandise.
But Amazon also has played hardball in states where Amazon does not collect sales taxes from those sales. In March Amazon announced it was closing its affiliate program in Illinois, a day after the governor signed a law requiring Amazon and other online retailers to collect sales taxes on goods sold in the state.
