Nashville, Tenn. (TN Tribune)-Tennessee has been generous to Amazon over the past decade, lavishing one of the world’s richest companies with hundreds of millions of dollars in tax breaks so that it will expand its operations here. But now state and local leaders may need to prepare for Amazon to repay this generosity by stabbing Tennessee taxpayers in the back.
This summer, the retail giant announced it would delay until 2023 the opening of its Clarksville fulfillment center, which was supposed to be up and running this August. Despite having completed construction and committing to employing 500 people, Amazon cited supply chain issues as the reason for the sudden change of heart. This should worry taxpayers, because Amazon reportedly took $1 million in subsidies from the state’s FastTrack Program to build a Clarksville facility in exchange for promising those 500 jobs. And state officials must consider how it will get that money back from Amazon if the delay continues, or worse, if the facility never opens at all.
At a minimum, Amazon owes the state a firm date for opening the facility and a commitment that it will return the $1 million in taxpayer money if it fails to meet the target. It is the least Amazon could do, given how much in public funds it has taken from Tennessee over the years. Of course, that’s probably wishful thinking, considering that Amazon reportedly did not even extend the courtesy of communicating to the state Department of Economic and Community Development that it was delaying the opening prior to announcing it.
And the Clarksville delay is just the latest example of why officials must consider how it can hold Amazon accountable for any broken promises today and in the future.
In 2019, Amazon received a city grant subsidy of $17.5 million and a state grant of $86.7 million to build office towers in downtown Nashville. But in July, the company suddenly announced it was pausing construction at one of its towers until it decides how to best use the space now that remote work is more popular. It’s disappointing, but not all that surprising, to see Amazon changing its plans after accepting millions in grants from the city and state.
In fact, since 2012, Amazon has received more than $150 million in state and local tax breaks in Tennessee: $18.2 million for a Memphis distribution center, $2 million for a facility in Shelby, $1.6 million for an Alcoa warehouse — the list goes on and on. Add it all up, and you have a stunning total that ranks among the Top 10 in the nation over that time.
All of this for a company whose 2021 two-day Prime Day event yielded $6.8 billion in gross sales; for a company whose total revenue last year was nearly $470 billion; for a company whose CEO took home 6,474 times the median Amazon employee’s salary. Amazon has no excuse to take money from hardworking Tennesseans if it cannot uphold its end of its economic development agreements.
There is no denying that Amazon is grappling with economic challenges — but so is Tennessee and the rest of the country. Families across our state are struggling every day with the high costs of gas and essential household products because of inflation — not to mentions fears of a potential recession. They must not be the ones left holding the bag when a parsimonious mega corporation does not want to lose some money on a warehouse or office.
Making matters worse, these types of tax incentives are often poorly designed public policies that do not always put taxpayer money to good use; cities and states are incentivized to offer Amazon more taxpayer dollars than the tech giant actually needs just to beat out other competitive offers. On top of this, Amazon then frequently fails to deliver on the economic commitments, which leaves communities without the jobs and prosperity they were promised.
What’s clear is that Amazon does not have the interests of Tennessee taxpayers in mind and believes it does not need to hold up its end of any economic bargain. This is why officials must demand Amazon pay back the people of Tennessee if any project across the state is further delayed or cannot be completed. And going forward, state and local leaders should put an end to Amazon’s tax grifting here in Tennessee and stop handing it money it clearly does not need.
