A Senate committee approved a plan Tuesday that would allow online retail company Amazon to avoid collecting sales taxes on goods shipped out of a distribution center under construction in Lexington County.
The Finance Committee sent the bill to the full Senate floor by a 15-5 vote. Opponents were unhappy that the body did not hold the usual public subcommittee hearing beforehand.
The bill would instead leave it to those who buy from Amazon to pay the sales tax. Under its language, Amazon would be exempt, because “owning or utilizing a distribution facility within South Carolina is not considered in determining whether the person has a physical presence in South Carolina sufficient to establish nexus with South Carolina for sales and use tax purposes.”
The bill would allow for a five-year exemption, but would only occur on the condition that Amazon hire at least 1,249 employees and keep 1,000 on its staff until 2016.
Legislators brought the bill forward after Amazon threatened to leave the state if it did not receive the exemption. Former Governor Mark Sanford’s administration promised it would make a “good faith effort” to get the tax breaks when it signed a deal with Amazon late last year.
Opponents say the exemption gives Amazon an unfair edge over other retail stores that would still have to pay the sales tax. Supporters view it as necessary to create over 1,000 jobs in a state with one of the nation’s highest unemployment rates.
The bill would still have to pass the full Senate and then head over to the House. Governor Nikki Haley said she opposes the deal, but added she will not veto it because she does not want businesses to see South Carolina “as a state that breaks its promises.”