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June 15, 2007

State corporate welfare update

Good Jobs First of Washington does a good job of beating up governors and mayors for giving away taxpayer money to corporate fat cats for too little in return. They've also built an excellent database and reporting mechanism on deals. Here's the latest newsletter, with reports on sports outfitter Cabela's, a serial abuser of subsidies; ThyssenKrupp, whose Alabama steel mill I wrote about a few weeks ago; and Radio Shack, which is laying off hundreds in Fort Worth after getting big taxpayer subsidies for its headquarters building.

Cabela's recently announced that it will begin collecting sales tax on catalog and internet sales to residents of states where it also has retail stores. That's big news: Cabela's has been a holdout among national retailers with both "bricks and clicks," most of whom quit dodging such sales tax collections years ago. Normally, state "nexus" rules require companies with a substantial physical presence in the state to collect sales tax on all purchases that occur in the state - whether they occur in a store, via the internet or by catalog.

But as it morphed from mostly a catalog operation to also include a chain of (massively subsidized) mega-stores, Cabela's sought and won rulings from attorneys general in a reported 19 states that its catalog, internet, and retail divisions were essentially separate entities and therefore did not create overall nexus.


Posted by Jay Hancock at 2:24 PM | | Comments (0)
Categories: Corporate welfare
        

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Wednesdays and Fridays.
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