South Carolina legislators voted Wednesday to welcome Amazon.com to the state with a sales tax exemption, after the online retailer upped the ante of jobs and investment.
The House voted 97-20 to give Amazon a five-year exemption from collecting sales taxes from online shoppers in South Carolina. The vote comes three weeks after the chamber voted 71-47 to reject the deal.
The online retailer sweetened the pot before the re-vote. To get the exemption, the company must create at least 2,000 local, full-time jobs with health benefits and invest $125 million by the end of 2013. That's up from 1,250 jobs and a $90 million investment. The company also pledged not to open a retail store in the state.
The Seattle-based company does not currently collect the taxes from South Carolina shoppers. Under the deal, it would begin doing so in January 2016.
"This will never really cost us more than what we're getting today, which is nothing," House Majority Leader Kenny Bingham, who represents Lexington County, said at the podium. "When we lose sight of what 2,000 jobs mean, we're really getting blind."
The bill requires another perfunctory vote before heading to the Senate.
Amazon vice president Paul Misener said he looks forward to passage in that chamber.
"We thank the House for voting to bring jobs and investment to South Carolina and we're grateful to the numerous small businesses, community leaders, and public officials in the Midlands for the groundswell of public support," Misener said.
Nearly 50 legislators who voted no last month changed their vote to yes, while two changed their vote to no. Even Bingham said he was stunned by the turn. He said Misener called him Tuesday night to offer the enhanced deal, to show Amazon's commitment amid concerns the company would pack up and leave when the exemption ended.
Rep. Chip Limehouse, R-Mount Pleasant, said he ultimately could not turn his back on 2,000 jobs for central South Carolina, especially considering the incentives packages legislators have passed to bring jobs to the coast.
"In five years, if Amazon stays on, this will be the smartest vote those of us switched took," he said.
Rep. Wendell Gilliard, D-Charleston, said he "flipped for jobs."
"Let's just put people to work," he said.
Hours after the last vote, Amazon announced it was taking job postings off its Web site and abandoning the site in Lexington County. The million-square-foot facility off Interstate 77 is now about 20 percent complete.
The deal was negotiated under former Gov. Mark Sanford, and signed in December, but was opposed by Gov. Nikki Haley. She and tea party activists who oppose the deal say it's not fair to existing retailers. Haley said Wednesday the sweetened deal changed nothing.
"The governor's position has remained the same throughout this process, and nothing that happened today, or that will happen tomorrow, will change any of that," said her spokesman, Rob Godfrey.
She has said that while she opposes the deal, she will not veto it. If the Senate approves it too, she will let it become law without her signature.
The effort puts South Carolina amid a national e-commerce debate.
The public relations campaign opposing the deal included newspaper, radio and TV ads funded by Alliance for Main Street Fairness, a Virginia-based group that formed a state chapter in March and is backed by Wal-Mart and other big-box retailers. The group cites hundreds of local businesses among its supporters but declined to release information on its funding.
The spokesman for the state chapter attributed the flip-flopping to dubious promises, including talk of Amazon possibly expanding into Spartanburg, and pledged to continue the fight in the Senate.
"We'll rally our troops and voice our concerns to the Senate where we hope they will come to a more fair and rational decision. The case against this special deal continues to grow on a daily basis," he said. "We're confident the Senate will stand with Main Street and against this exemption that is clearly a slap in the face to brick-and-mortar retailers across our state."
The alliance advocated for legislation in Texas, approved last week, which would require companies such as Amazon to collect sales taxes if they pay marketers in Texas to advertise or if they have a warehouse or distribution center in the state. Amazon announced in February it was pulling out of Texas after the state's comptroller general billed the company for $269 million in uncollected sales tax over a four-year period, plus interest and penalties. Several other states have passed similar laws.
In Tennessee, Amazon has threatened to pull plans for new distribution centers if a similar sales tax agreement negotiated under that state's former governor falls apart.
Bingham told critics of South Carolina's deal the only way to level the playing field for retailers here is to bring Amazon to the state. He noted legislators approved the same deal for QVC in Florence five years ago and that company now collects the tax. The difference then, he said, was the governor asked legislators to pass it.
Those voting for it included Haley, then a House member from Lexington County.
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