AMAZON STOPS WORK ON DISTRIBUTION CENTER IN SC OVER TAX LEGISLATION; 1250 JOBS GO AWAY

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.

US SENATOR INTRODUCES INTERNET TAX BILL

A bill called the Main Street Fairness Act, sponsored by Rep. Bill Delahunt, was introduced in the House in July of last year. The bill would allow states who are members of the Streamlined Sales and Use Tax Agreement to collect state taxes for online sales. The agreement is an attempt to simplify tax collection and administration in an effort to make the ability for online merchants to collect state taxes more realistic.

CNet is now reporting that the House bill may be getting some assistance in the Senate thanks to Dick Durbin, a senator from Illionis. Durbin plans to introduce a bill by the same name as the House bill soon after Tax Day. It’s not surprising a Senator from Illinois would be introducing such legislation. In March, Illinois Governor Pat Quinn signed the state’s Main Street Fairness Bill which would require any online retailer with affiliates in the state to collect state sales tax for remote purchases. As a result of the new Illinois law, Amazon killed its affiliate program in the state.

If the Main Street Fairness Act makes it to the President’s desk and is signed into law, online retailers like Amazon wouldn’t be able to avoid the collection of state taxes by simply killing affiliate programs. The bill would make tax collection for those states who are part of the Streamlined Sales and Use Tax Agreement the law of the land.