JULY 11, 2011

Saving the Amazon (in Pennsylvania)

When it comes to stopping the spree of tax hikes, the Pennsylvania legislature and Gov. Tom Corbett got it right this past session. In response, the world's largest online retailer, Amazon.com, will boost operations in the Keystone State by expanding a Lehigh Valley facility and hiring hundreds of new full-time employees, according to PoliticsPA.

Amazon's expansion results from the state's refusal to levy a sales tax on Pennsylvania residents for items purchased online from out-of-state retailers.

The seven states with such taxes have yet to see any economic benefit, as online retailers flee the state and terminate affiliate programs. California's recent passage of an "Amazon" tax that treated Amazon.com as an in-state company for having "affiliates" operating in the state took effect July 1.  In response, the online retailer terminated nearly 25,000 affiliate programs with California businesses, which include mom-and-pop stores that sell their goods through Amazon. And Rhode Island's State Treasurer Frank Caprio has acknowledged the detrimental effects of the tax on his state and called for its repeal.

Dave Clark, vice president of Amazon's North American Operations, reports that the company's PA expansion owes to the fact that "Governor Corbett and other state officials have demonstrated their commitment to Amazon jobs and investment." Considering that Pennsylvania has the 12th-worst business climate in America, Clark's praise is no small achievement. 

posted by CARA DOCHAT | 04:00 PM | 1 comment