In Search for HQ Location, Amazon Should Consider the Tech Policy Landscape

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

Tax Policy

Amazon announced in September preferences for a number of items in searching for an Amazon HQ2 location. In this article, Travel Tech's President Steve Shur suggests another factor Amazon should consider, how cities treat the sharing economy.

Steve Shur

By Steve Shur

Steve Shur is President of The Travel Technology Association ( Travel Tech). Travel Tech is the premier trade association for the travel technology industry, representing the leading online travel companies, travel technology solutions providers (GDSs), and short-term rental companies.

As Amazon weighs bids from cities and states around the country vying to be selected as the home of their new headquarters, the company that promises to bring drone delivery to everyone must consider whether a suitor city has exhibited technology-friendly policies. There is no better indicator of a city's mindset toward technology and innovation than how that city has treated the sharing economy.

Cities that have embraced ride sharing and home sharing are likely to appreciate and respect technological innovation. Conversely, cities that have enacted limiting or prohibitive policies toward new economy leaders like Uber, AirBnB, HomeAway and others should be discounted. If a city is going to prohibit homeowners from renting out their properties, what makes anyone think they will be any more accommodating to Amazon's future innovations, whether it's drone delivery or something we haven't even thought of yet?

Amazon stated that they are looking for:

  •   Metro areas with more than one million people
  •   A stable, business-friendly environment
  •   Urban or suburban locations with the potential to attract and retain strong technical talent
  •   Communities that think big and creatively when considering locations and real estate options.

Last year, Uber and Lyft left Austin, Texas, after the city imposed burdensome regulations on the ride-sharing companies. Uber and Lyft returned to Austin earlier this year only after Governor Greg Abbott signed into law a bill that puts the state – not local governments – in charge of implementing regulations on these technology innovators. Austin also imposed new regulations on home sharing, which are among the most restrictive in the country.

Hostile Position

New York's tax landscape as well as the City's hostile position toward home sharing and ride sharing platforms, and even dog-sitting apps like, should rule out the Empire State immediately.

The city of Chicago has previously sued online travel companies over taxes, just recently proposed yet another rideshare tax increase to help finance public transit, and already taxes short-term rental owners and hosts at a rate that exceeds that of local hotels.

And with the Twin Cities poised to host the Super Bowl in just a matter of months, St. Paul and Minneapolis are both in the process of enacting ordinances that place onerous licensing requirements on short-term rental platforms like HomeAway and Airbnb, which also raise serious legal concerns with respect to platform liability and data privacy.

Very Tech Friendly

To the contrary, Arizona, led by a very tech-friendly Governor Ducey, has shown a great understanding of the new economy and what it takes to make that state attractive to technology companies. Arizona recently passed legislation that ensures that home sharing remains legal statewide. At the time of passage, Governor Ducey said:

“It's time for our laws to get with the times. The sharing economy offers people great services at the tip of their finger and the click of an app. Now, Arizona leads the nation in embracing the Sharing Economy, including the growing home sharing industry. We are committed to doing everything we can to support 21st-century companies that employ Arizonans, advance the way we do business and improve the way we live. I thank Rep. Jill Norgaard, Senator Debbie Lesko, and Senator Steve Smith for making the sharing economy a priority this session.”

Well said, Governor.

Amazon take heed. All the promises built into those fancy proposals can't hide the policy mentality of a city or state.

Copyright © 2017 Tax Management Inc. All Rights Reserved.

Request Daily Tax Report: State