Columbia, SC (WLTX, AP) - The South Carolina House of Represenatives Tuesday voted down a tax incentive package for Amazon.
The vote tally was 71-47 against.
The proposal would have exempted Amazon from collecting sales tax for five years.
Amazon had pledged to build a distribution center in Lexington County, but that was contingent upon the tax break. In recent weeks, the company had suggested it would pull out of the deal if the incentives were removed.
"If they choose to pack up, so to speak, and leave South Carolina, we're still not gonna be collecting any sales tax from South Carolina residents who buy things from Amazon. If they got to another state, and we won't have those 1,200 jobs," said Rep. Dan Cooper, a Republican from Anderson County.
Supporters say South Carolina needs to honor the deal made by the Commerce Department under former Gov. Mark Sanford. They say it would otherwise give the state a reputation of not keeping its commitments, and hurt the state's ability to attract employers in the future.
"I think it puts us in a bad position when we're negotiating and competing against another state for these jobs, because they're gonna use this. They're gonna say, 'Look what South Carolina did for Amazon. They couldn't deliver. What makes you want to go there?'" said Cooper.
Opponents of the exemptions said the deal would lead other companies to believe they could threaten to leave the state in order to get what they want.
"Every time a business comes to South Carolina or every time a business in South Carolina wants to leave, they will hold this over our heads, hold us hostage. And we'll be forced to give away these tax give-aways and unfair competition to every business, and I think this sets a very, very bad precedent," said Republican Rep. Thad Viers of Horry County.
Small business owners and Walmart had lobbied against the incentives, saying it would provide an unfair business advantage to the online retail giant.
"Regional distribution centers should not have an unfair advantage when they're competing against businesses in our state, small mom and pop business. I don't think we as a state should get into that business," said Viers.
After the vote, Amazon Vice President Paul Misener said the company's "cancelled $52 million in procurement contracts and removed all South Carolina fulfillment center job postings from our site."
Haley spokesman Rob Godfrey said Haley's been clear about her stance. "The people of the state have made it clear they don't want government picking winners and losers or playing favorites among businesses, and today, the House listened to them," he said.
Haley, who represented Lexington County in the House, has said for weeks she did not support the tax break but would let it become law if legislators approved it.
Amazon has estimated the center would create 1,200 jobs.