It seems as though Indiana and Pennsylvania, two states that have yet to pursue internet sales tax laws like so many others around the nation, are being rewarded for their position on the issue by Amazon.
Amazon, which along with Overstock.com has assumed a leading voice for the e-commerce industry in the ongoing debate over the necessity and constitutionality of such tax bills, has announced plans to open a new fulfillment center in Indiana and increase hiring at a similar facility in Pennsylvania in the near future.
Several hundred workers, many of them full-time, will be employed at each of the facilities, reiterating the huge impact that such moves can have on local economies and job markets.
In announcing a new 900,000 square-foot distribution facility in Plainfield, IN that is set to open by the end of the summer, Amazon didn’t mince any words in explaining why it is increasing its presence in the Hoosier State.
“We’re expanding in Indiana because Gov. Daniels and other state officials have demonstrated their commitment to Amazon jobs and investment,” said Dave Clark, vice president, Amazon North American operations.
Once the Plainfield center is open, Amazon will have a total of four fulfillment centers in Indiana, all of which are operated by subsidiary Amazon.com.indc LLC. The subsidiary tie is an important one, as Indiana does not consider Amazon subsidiaries the basis for the in-state presence that may otherwise necessitate the company collecting taxes for web purchases.
California recently became the latest state to pass an online tax law with a provision requiring companies that operate subsidiaries to comply with sales tax collections.
Meanwhile, Amazon has put out the Help Wanted sign at its Breinigsville, PA fulfillment center as well, with plans to bring in a wave of new workers for the facility just outside of Allentown.
“We’re excited to be hiring for hundreds of additional jobs at Amazon’s fulfillment centers in Pennsylvania this summer,” Clark said in a separate statement.
The lesson here seems pretty obvious: if you’re a state that isn’t going to try to get an online sales tax implemented anytime soon, the chances of Amazon doing business with you looks pretty good. Amazon’s got more than 60 of these fulfillment centers operating around the globe and the company has wasted no time in closing centers or abandoning plans for new ones in states that have aggressively pursued new sales taxes. What has happened in such states, as well as these recent developments in Indiana and Pennsylvania, further illustrates that Amazon can dictate state policy with regards to taxes just as much as states can dictate whether Amazon does business in them or not.
And it also proves that the showdown between both sides isn’t going away anytime soon. As always, we welcome your thoughts and comments!