News and Press Releases for July 2007

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Governor Calls for Repeal of Corporate Welfare
BILL FORCES LOCAL SMALL BUSINESSES AND TAXPAYERS TO SUBSIDIZE LARGE OUT-OF-STATE COMPETITORS

July 11, 2007

Columbia, S.C. – Gov. Mark Sanford visited Charleston and Duncan today to push for the repeal of recent legislation that forces our state’s small businesses to subsidize larger corporate competitors, and urge concerned citizens not to take the bait when it comes to subsidizing big box retailers at the expense of local small businesses and taxpayer dollars.

The recent bill passed by the General Assembly – despite the governor’s veto – would give sizable and unprecedented tax rebates to outdoor retailers like Cabela’s and Bass Pro Shops without reliable guarantees that these stores would meet sales and visitor goals. The legislation effectively guarantees a 50 percent rebate of all sales tax revenue generated from their stores without oversight or approval, as is presently the case with other sales tax incentive programs. This unprecedented move will inevitably open Pandora's Box in the future with regard to sales tax exemptions. As well, this law sidesteps accountability to the taxpayer by granting these tax benefits before the store opens its doors as long as it “looks like” the store will eventually meet the necessary criteria. 

These advantages are currently not enjoyed by other retailers in South Carolina, meaning that our state’s small businesses and ‘mom and pop’ stores are effectively being forced to subsidize their competition.

“This bill does something we should never do to small businesses in our state – it takes their money to subsidize a large corporate competitor that could well put them out of business,” Governor Sanford said. “Let’s be very clear, though – if one of these businesses came to South Carolina on a level playing field, as Sportsman’s Warehouse did in Columbia, we’d be the first welcoming them here. But we don’t think it’s prudent to use tax dollars to favor one retailer over another, and we ask taxpayers to make their voices heard and tell their legislators that South Carolina’s long-term economic competitiveness should not be sacrificed for a short-term splash.”

Other states, including Georgia, have been faced with this same tax incentives question and decided not to use public tax dollars to pick winners and losers in the world of retail. Kentucky recently considered legislation to provide $20 million in tax incentives to Cabela's, and the state’s legislators ended up rejecting the proposal.