ABA Urges South Carolina to Level Playing Field

In a letter dated May 3 to South Carolina Gov. Nikki Haley, ABA CEO Oren Teicher, writing on behalf of the association’s South Carolina member bookstores, thanked the governor for her support of Main Street businesses by not providing Amazon.com with a sales-tax exemption in exchange for opening a distribution facility in the state. Amazon.com has said it will not open a distribution center unless it is provided a sales-tax exemption.

At a press conference [1], Gov. Haley stated that she would like Amazon.com to do business in South Carolina, but on a level playing field. “[Amazon.com] got free property, they got tax incentives, they got plenty of things. Don’t ask us to give you sales-tax relief when we’re not giving it to the bookstore down the street or we’re not giving it to the other stores on the other side of town. It’s just not a level playing field.”

While thanking the governor for standing up to Amazon.com, Teicher stressed, “The hard truth, however, is that more needs to be done. Our member booksellers are still working at an unfair competitive disadvantage to any number of remote, online retailers that, like Amazon.com, have broad networks of online affiliates acting as sales agents in the state.”

In his letter, Teicher called on the governor to support efforts in South Carolina to “level the playing field for all Main Street retailers by clarifying existing South Carolina sales tax laws and requiring companies with broad networks of online affiliates to collect and remit sales tax to the state.” He noted that online affiliates in South Carolina “act as virtual sales agents for remote retailers, promoting a company’s products and then earning commission when they make a sale,” thus establishing Amazon’s nexus in the state, which requires the company to collect and remit sales tax.

Teicher also stressed, “Amazon.com’s decision not to open a facility in South Carolina because it will not receive a sales tax exemption is merely the latest example of the remote retailer’s bullying behavior as it attempts to maintain its significant, inequitable competitive advantage over Main Street retailers.” He added that “through its actions in South Carolina, as well as in numerous other states that are looking to level the playing field for Main Street, the online retailer has shown it will go to extraordinary lengths to avoid collecting and remitting sales tax.”

Teicher continued, “While Amazon.com might boast about the 1,200 jobs it would bring to the state, continued sales tax inequity in South Carolina will only erode the very in-state business environment that creates and sustains many more thousands of jobs. While online sales grow, propelled in part by consumers’ incorrect belief that it is tax-free, many Main Street businesses, which are obeying the law, have been forced to lay off workers or, even worse, to close their doors.”