The South Carolina House overwhelmingly reversed itself Wednesday and voted 97-20 in favor of a special tax break for online retailer Amazon. 50 legislators changed their votes from last month, when the House rejected a similar deal.
Some lawmakers broke into applause as the result was announced.
Shortly before the vote, House Majority Leader Kenny Bingham (R-Lexington), who represents the area where Amazon would locate, gave a rousing speech in support of the deal.
When we can turn our backs on 2,000 jobs, when the unemployment rate is what it is (9.9 percent) in the state of South Carolina, then we’d better have some explaining to do when we go back home… I don’t know how we do that when this is really costing us nothing more than it is today. And that is nothing.
The legislation allows Amazon to avoid collecting sales taxes for the first four years at a distribution center the company is building in Lexington County. Amazon said it would pull out of South Carolina if it did not get the exemptions.
Dozens of legislators, Democrats and Republicans alike, defected to support the bill Wednesday, saying they did not know the full details in April. Bingham said Amazon sweetened the deal by offering to increase its hiring to 2,000 jobs (up from an original 1,249) and spend at least $125 million in capital investment (a jump from $90 million).
Rep. Bill Hixon (R-North Augusta) said those numbers convinced him to change his mind.
I looked at (the deal) and when they told me that we went… to $125 million in investment and we went from 1,200-odd jobs to 2,000 jobs, that did it for me.
The South Carolina Alliance for Main Street Fairness, a group of businesses that has emerged as the main opposition to the deal, said it would continue fighting the legislation as it heads to the Senate. Executive Director Brian Flynn said he was suspicious about why so many legislators changed their minds.
That was a huge flip-flop. I think something’s at play. I noticed there were maps of the new (proposed legislative) districts on legislators’ desks when they got back from lunch… I think it’s something to look into, possibly.
Flynn hinted House leaders twisted arms to get the votes. However, Bingham said legislators changed their minds after learning Amazon wanted to build more than just one facility in South Carolina.
Amazon’s plans for the state of South Carolina are much bigger… I’ve shared that with my colleagues, they’ve taken notice, and a result they took a very strong vote. I think that is a testament to a lot of our elected leaders. It is never easy to back up and say, “You know, maybe the first time I didn’t understand.”
Bingham said Amazon was also in negotiations with Spartanburg before pulling out after April’s vote. He did not elaborate or offer further details.
The support was bipartisan, with only 11 Republicans and 9 Democrats opposing the deal. Rep. Leon Howard, who told SCRN Tuesday that he opposed the legislation, did not vote. Not one opponent of the bill took the floor to oppose the deal, although afterwards they continued to say the exemption for Amazon would hurt small businesses in South Carolina that are required to collect sales taxes.
Rep. Tommy Pope (R-York) said he reconsidered his vote after reflecting that South Carolina would be unable to collect taxes whether Amazon was in Lexington County or not.
I tried to put that in the filter of, okay if I don’t vote (or) if I do vote what’s going to happen? The only way to get them to ultimately collect tax… is to have them here. If we don’t have them here, we never level that playing field.
Bingham admitted he did not know if Amazon would leave South Carolina after five years, but said the company seems intent on staying even after the exemptions expire in 2011.
I don’t know that anyone knows who’s going to be anywhere in five years. I certainly hope my business is going to be around in five years, but there (are) no guarantees in life. What they did say is that their business model is such that they will be here in five years. Their business model is not to stay here, then up and leave.
House leaders attached the deal to a Senate bill that exempts certain medical equipment from sales taxes. By doing so, they allowed the Senate to procedurally take it up once they finish with the budget.