Top States for Business
Virginia is America's Top State for Business 2021
Top States for Business

Georgia punishing Delta over NRA stance won't help Atlanta's bid for Amazon HQ2

Key Points
  • Georgia lawmakers approved taking away a $50 million jet fuel tax break from Delta Air Lines after the airline cut discounts for NRA members.
  • States are offering huge financial incentives to woo Amazon HQ2.
  • The unusual Georgia move to punish a corporation for a political stance by removing a tax break comes as Amazon considers Atlanta among the finalists for its HQ2.
Getty Images

If the city of Atlanta still has a chance of winning the Amazon HQ2 sweepstakes over 19 other finalist metro areas, Georgia lawmakers are doing everything in their power to prevent it from happening. The latest was the decision on Thursday by Georgia lawmakers to pull a tax break for Delta Air Lines, which calls Atlanta home, after Delta was among the first major corporations to end discounts for NRA members.

Amazon is closing in on its search for a second headquarters, and a bill that punishes a company for its political leanings by repealing a tax break probably won't sit well with the socially progressive Amazon as it compares the pitches, including tax incentives, that the Amazon HQ2 cities and states have put together.

Delta announced on Saturday it would no longer give discounts to NRA members travelling to Dallas in May for the organization's annual meeting. The Georgia tax bill pulls a jet-fuel exemption for Delta, valued at $50 million.

The move by Georgia's statehouse was not a complete surprise as earlier in the week Casey Cagle, Georgia's lieutenant governor who presides over Georgia's Senate, said in a tweet he would "kill any tax legislation" that helps Delta unless the company continues ties with the NRA.

Delta said on Friday that it is not backing down, with its CEO saying "its values are not for sale."

The current fight between Delta and its home state is occurring against the novel backdrop of many corporations speaking up about gun control for the first time. But at the same time, a state exacting punishment against a corporation's political speech by repealing an existing tax break comes at a time of intense competition between states to attract major employers.

In the past, states have caved to corporations when a political furor has erupted. In 1993 a Texas county north of Austin took issue with Apple's policy of giving health benefits to same-sex couples, but the county relented and gave the tech giant tax breaks. Salesforce used its pull in Indiana to soften the state's Religious Freedom Restoration Act in 2015.

Amazon has a history of speaking out

Amazon and its founder and CEO Jeff Bezos have a socially progressive reputation. Bezos accepted the Equality Award from the Human Rights Campaign in November. He donated $33 million to a scholarship for participants of the Deferred Action for Childhood Arrival program. And he has recently come under fire for sitting out of the gun debate.

The Georgia tax bill is not the first move by state lawmakers that won't play well at Amazon. Georgia's Senate also recently passed an adoption bill seen by critics as being anti-LGBT. In the past, many Georgia lawmakers have used the allure of Amazon to push progressive measures. The company promises 50,000 jobs and $5 billion in investments for HQ2. Some states are offering Amazon financial incentives valued in the billions of dollars, including $7 billion from New Jersey for its finalist city Newark.

Amazon HQ2 has become a lightning rod on both sides of the political divide. A conservative political lobby that is part of the Koch brothers political network recently argued against states offering tax incentives to Amazon.

Greg LeRoy, the executive director of corporate watchdog group Good Jobs First, isn't sure how much Georgia's bill will influence Amazon's decision — if it hasn't already been made.

"There's been so much punditry about trying to get into the company's mind," LeRoy said.

LeRoy believes Amazon is a calculating company that will make a decision based on economics, and he sees workforce reasons why Atlanta's bid could fall short.

"If you're seriously going to hire 50,000 braniacs, you need a lot of executive talent," he said. The way Atlanta's current corporate sector is set up and spread out— Coca Cola and Home Depot as examples — would make it hard to attract top executives. LeRoy believes Atlanta lacks the transit system to be a serious contender because congestion and lack of public transport will impede the ability of top talent to easily commute.

The Georgia tax bill costs Delta $50 million in jet fuel sales tax exemption. The deal for NRA members would save travelers between 2 and 10 percent on a $180 flight, which comes to between $5.60 and $18. The company indicated in a statement that it would not reconsider cutting ties with the NRA, and it would not consider moving its headquarters out of Atlanta.

New Jersey Governor Phil Murphy: HQ2 is a once-in-a-lifetime opportunity

This story has been updated to reflect that Greg LeRoy of Good Jobs First believes Atlanta's bid for Amazon HQ2 could fall short because the city's transit system isn't set up to encourage top talent to easily commute. An earlier version misstated his argument.