Amazon.com, Inc. already had been gifted free land, worker training and tax abatements before starting to build a new distribution center in S.C. But that wasn't enough. The corporation demanded five years of sales-tax free operation in the state, threatening to abandon its plans otherwise. Small businesses and taxpayer advocates fought the scheme and won this week, as a strong bi-partisan majority in the House refused to undermine in-state retailers with this additional giveaway. The S.C. Commerce Secretary credited "an emerging public view that businesses deserve a level playing field on matters of tax policy, especially sales tax policy." Kudos to our friends at the S.C. Small Business Chamber, SIBA and others for their stand.
We hope the state will now act on the aggressive fixes proposed in this just-published _Bloomberg / Business Week_ commentary by AMIBA's Jeff Milchen. He contends Amazon should be made to collect sales tax in all of the states where it maintains facilities (it does so in only five of 17) and that we must pass national reform to stop handicapping storefront businesses. Please keep this momentum growing by sharing widely!
State-level reforms also continue to progress, with Texas and Connecticut advancing bills this month (the CT bill foolishly adds a sales tax increase to a measure squeezing the "Amazon loophole," undermining the work of tax fairness advocates). We're eager to help you with local outreach on the topic, such as producing local op-eds or materials. Also, AMIBA just released this collection charting the many Amazon Inc. facilities in the U.S. that seem to go unnoticed by state officials, as well as further sales tax reform action resources.
Post-publication updates: Critics said S. Carolina's actions would drive business away. To the contrary, major new locations and expansions immediately followed (though one of them is Walmart). However, after Amazon committed to adding 2,000 jobs (it previously claimed it would created 1,250), the House reversed course and passed a 5 year sales tax exemption for Amazon, which we expect will become law.
Indie Business News Briefs
Congress and the President repealed a widely unpopular provision would have required every business to file a 1099 form for each business-to-business transaction of $600 and up, beginning in 2012. We had little doubt it would be revoked, but it's good to see the deal done.
"The Devolution of Marketing" (pdf) makes the case for independent business from a different and welcome perspective: that of producers and manufacturers, and explores the perils of selling to mega-retailers.
The Wall St. Journal reported on the problem of increasing vacancies in U.S. malls and strip developments/big box clusters. The story mentions the rapid building of retail capacity since 2000, but neglects to consider we already had an over-supply of mall and big box space even then, as Stacy Mitchell and Jeff Milchen pointed out a decade ago. The U.S. now hosts 10 times more retail space per capita than many wealthy European nations.
The Rush to Build Walkable Urban Grocery Stores How normally large-scale grocers and retailers are fitting into urban settings.