Even before Amazon’s decision on Thursday to abandon the state of New York following a public outcry over lucrative tax breaks, there was a movement building in other states to ban the use of corporate tax breaks to raid fellow states in the quest for economic development.
Several states, including New York, Florida and Illinois, details Governing, have been discussing an End Corporate Welfare Act that essentially calls a cease-fire in the awarding of tax incentives to recruit companies from other participating states.
Supporters say such a multistate compact would end the “race to the bottom” of states trying to outbid one another in corporate giveaways.
However the incentives are particularly attractive to states that don’t have highly developed commerce ecosystems akin to those in Chicago or New York City. Georgia, for example, has the biggest film tax credit program in the country and Alabama has used tax credits over the last two decades to beef up its auto manufacturing industry, making it the “auto capital of the South.”
In Louisiana, lawmakers are considering changing how industrial tax incentives are decided, placing it back under the jurisdiction of the state government, rather than local governments, as it was prior to 2016.