Amazon packing after House vote
Online retailer cancels contracts, job postings for Cayce site
By TIM FLACH - tflach@thestate.com
Amazon all but told South Carolina goodbye Wednesday after the online retailer lost a legislative showdown on a sales tax collection exemption it wants to open a distribution center that would bring 1,249 jobs to the Midlands.
Company officials immediately halted plans to equip and staff the one million-square-foot building under construction at I-77 and 12th Street near Cayce.
"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.
The decision came shortly after state representatives rejected the tax break 71-47.
"People who think this is a bluff don't know Amazon," Lexington County Councilman Bill Banning said. "Too many other states want them."
The partly finished center probably will be completed and then "put into mothballs," he said.
Most Midlands lawmakers supported the exemption, but opposition fanned by a coalition of small merchants, national retailers and Tea Party activists proved insurmountable, even as Misener came to lobby lawmakers Wednesday in a last-ditch bid to save the proposal.
Other measures proposing the tax break remain alive, but a loss that was unexpectedly lopsided makes it unlikely any will be considered.
"This is really devastating," said House Majority Leader Kenny Bingham, R-Lexington. "Anything is possible, but this makes it pretty difficult to resurrect."
The loss of Amazon will be a black eye for future efforts to lure major employers to the state, Amazon allies warn.
"It's beyond a squandered opportunity," Banning said. "It's a disgrace. It's likely no one will even look at coming here for 10 years."
Foes of the tax break said the outcome isn't a blow to economic development but a warning against seeking what they call sweetheart deals designed to benefit a few at the expense of many.
It's also a message that the days of favors such as letting online retailers play to rules that other don't are numbered, they said.
"Amazon has told lawmakers across the country that evading sales tax collection is not central to their business model," said Brian Flynn, executive director of the South Carolina Alliance for Main Street Fairness, a mix of Midlands and national retailers. "Tonight (Wednesday) they've shown their true colors and proven they'll go to any length to protect their unfair advantage. These bullying tactics have been seen across the country.
I want to thank the South Carolina House for standing with small business owners who support our local companies."
The outcome ends a conflict that began after other retailers learned shortly after Jan. 1 that the package of incentives offered Amazon included a promise to seek the tax collection exemption.
Other merchants argued that put them at a competitive disadvantage, since buyers perceive Amazon's untaxed prices as lower.
Amazon's bid for it also suffered a setback when Gov. Nikki Haley - who calls job creation her top goal - took a hands-off approach on a deal shaped under her predecessor without much legislative consultation.
Haley said it's one she wouldn't make but would accept if approved by the Legislature, infuriating fellow Republicans who felt she unfairly put the onus on them.
Amazon allies portrayed the deal as favorable financially, saying it would net state and local coffers $11 million after an exemption costing $2.5 million.
The chorus of criticism increased as social conservatives, Tea Party members and other business groups lined up against the exemption even though Amazon allies warned that opposition endangered jobs badly needed in a struggling economy.
"This rejection is a slap at everyone in unemployment lines," said Scott Adams of Lexington, a telecommunication equipment executive who supported the Amazon proposal.
Other critics called the exemption too much on top of a free site, property tax breaks on equipment, state job tax credits and abolition of longtime Sunday morning sales restrictions in Lexington County to facilitate Amazon's round-the-clock opposition.
In the end, the tide of complaints overcame warnings from business and political leaders about broken promises harming industrial recruitment and the prospect of hundreds of new jobs for the area.
It's probably too late to persuade Amazon to reconsider its pullout, Banning said.
"It's over with," he said. "I don't think there's anything we can do to get them to stay."
Reach Flach at (803) 771-8483.
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