When Amazon expands, like it wants to in Florida, state and local governments practically line up to offer to pay the company to move.
Virginia officials approved $4.4 million in taxpayer subsidies so Amazon could build two warehouses in the state. California reached a deal where the online company was free from sales taxes for a year, saving about $200 million. Texas officials forgave $269 million in back sales taxes to get a new warehouse. New Jersey officials put up millions more in breaks.
All the deals were cut in the past three years. All for a company that had $61.1 billion in sales last year.
On Wednesday Hillsborough County commissioners will consider a package that could include up to $7.5 million in local and state tax breaks for Amazon to build a new warehouse in Ruskin for 1,000 employees. Hillsborough's offer was disclosed last week, shortly after Gov. Rick Scott announced that Amazon wants to create 3,000 jobs in the state by 2016.
Yet enticements are so small in relation to Amazon's multibillion-dollar business that analysts don't even bother studying their affect on expansion.
"They are a spec on the radar," said Matt Nemer, a retail analyst for Wells Fargo Securities in San Francisco. "They're just not big enough to make a difference."
Here's the rationale for why Amazon gets the incentives, at considerable public expense, anyway.