Carter: Miss. played as chump as Amazon takes tax-free ride

Amazon.com is clearly in a bind as states grow more eager to tax the online sales of the world’s largest cyber retailer. That makes it difficult to understand why Mississippi doesn’t stop digging through the couch cushions for loose change when it instead could get in line for a well deserved payday.

online-sales-taxIf nothing else, Mississippi could leverage some jobs out of Amazon, which is responding to the threats of states to apply Internet sales taxes by setting up warehouses or distribution centers in the individual states. Just this week, the Seattle-based company agreed to start collecting sales tax in Connecticut Nov. 1 — and to invest $50 million to build a future facility and bring hundreds of jobs there over two years, the Atlanta Journal-Constitution reports. The newspaper says the company now has a deal with South Carolina that will keep it from collecting sales tax until 2016, as long as it creates 2,000 jobs by the end of this year.

Further, Amazon.com is promising to bring between 2,500 to 3,000 jobs to Florida in exchange for a two-year waiver on collecting sales taxes, the Florida Times Union reports. In the offing are two distribution centers costing as much as $200 million.

Rick McAllister, the president and CEO of the Georgia Retail Association, said he expects a similar deal in the Peach State, the Journal-Constitution reports.

“I’m very comfortable saying Amazon will build a distribution center in Georgia,” McAllister told the AJC.

Goodness knows the retailer needs the help, especially if it expects to maintain operational efficiency amid skyrocketing sales.

The Wall Street Journal’s MarketWatch puts the cyber seller’s revenues for 2012 at $61 billion, up from $19 billion in 2008.

Share prices are flying high as well, up more than $100 in the past 12 months, with a 52-week high of $284. Shares stood at $265 at midday Friday.

You betcha Mississippians are contributing to that growth in sales and share price. So why aren’t some of those freshly-made dollars coming back this way? After all, we love being green just as much as the next state.

As you know, “tax” might as well be a four-letter word in the office of the governor and our legislative leaders. But “jobs’ is a genuinely beloved four-letter word, and if the Capitol gang fails to turn around their lackluster performance on that front, they could find themselves spending afternoons at home wishing  they had played “Let’s Make a Deal.”

Nor should fairness be overlooked.  If JC Penny, Sears, Belk, Target and the rest are collecting here, why does Amazon get a solo stroll down Easy Street?

Amazon is indeed in a bind and is simply looking to buy time, says David Brunori, a professor of public policy at George Washington University, in the Atlanta Journal-Constitution report.

Negotiating deals to collect taxes at a later date helps Amazon avoid costly litigation and gives it extra time to rake in huge dollars as a tax-free site.

“There’s recognition on Amazon’s part that the tide will eventually turn against them legally,” Brunori told the AJC. “They want to buy time before that happens.”

“Buy” is the operative term here. And if Amazon is in the market to buy some time, Mississippi ought to be willing to sell some.

Clearly, a twofer is waiting to be had. Mississippi can give Amazon.com a two or three-year exemption on the sales tax collections exchange for putting distributors here. And once the centers opened, Amazon will have established a bricks-and-mortar presence, thus making collection and remittance of sales taxes to the state mandatory.

 

 

, , , ,

3 Responses to “Carter: Miss. played as chump as Amazon takes tax-free ride”

  1. Elaine Vechorik Says:

    Reaching over state boundaries for tax money is “taxation without representation” isn’t it?

    I hear the excuse “We need go give small local businesses a level playing field against Internet sales.” Heck, they already have it. It costs more to order from Internet and pay shipping costs than it costs to just buy locally and pay only 7% sales tax.

    Mississippi already has more government than private sector. The more money MS takes from taxpayers, the closer we creep to socialism. Read this article about MS “The Death Spiral States” (advises businesses and people not to locate here). http://msbusiness.com/businessblog/2013/02/08/carter-miss-played-as-chump-as-amazon-takes-tax-free-ride/?utm_source=WhatCounts+Publicaster+Edition&utm_medium=email&utm_campaign=MBJ+E-Bulletin+%E2%80%94+Woman+gets+10-year+sentence+for+embezzling+%24277K&utm_content=BUSINESS+BLOG++Carter%3A+Miss.+played+as+chump+as+Amazon+takes+tax-free+ride

  2. Julie Patrick Says:

    Stop looking at Amazon and look at what it will do to small businesses in Mississippi that already struggle to compete with mega corporations. Of course Amazon would like to drive small internet businesses out and have the market to themselves, so they will make a deal with the states. As the previous response notes, our customers pay shipping and if it were available locally the consumer has the incentive of obtaining their product immediately and seeing the product before they buy. Many online web stores are for products not readily available otherwise.

    Most of our sales are outside the state and many of our competitors live in states with no sales tax. So, our customers will run to our competitors if we do not pay the sales tax for them, out of our pocket. We do not subscribe to your magazine or participate in the Chamber of Commerce, because our market is not local and we do not compete with local businesses. The internet tax will drive us out of business and the income tax we pay to Mississippi will be turned into assistance payments made to us, adding to the poverty of Mississippi. The average Mississippian will suffer also, since competition in the market place drives down prices to the consumer.

Trackbacks/Pingbacks

  1. Miss. played as chump as Amazon takes tax-free ride « - February 13, 2013

    […] msbusiness.com/businessblog/2013/02/08/carter-miss…-ride […]

Leave a Reply