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But Amazon crosses the line by demanding such exemptions even where it has opened warehouses or other facilities, Brunori said, criticizing states that have cut deals allowing the company to avoid or delay sales-tax collections.

"You let them off the hook for what you make every brick-and-mortar retailer in the state collect? That runs counter to every notion of good tax policy," he said.

South Carolina

In South Carolina, leaders who gave Amazon the sales-tax break say they have no regrets. After all, if they'd said no, the company would have moved its warehouse to a nearby state.

"It's easy to be against something if you have a job," said House Majority Leader Kenny Bingham, R-Cayce, who represents the area near the Amazon warehouse. "We're going to get 2,000 jobs and $125 million in investment we wouldn't get otherwise."

Going all out to land a new Amazon distribution center was a "no-brainer," said Randy Halfacre, mayor of the town of Lexington and president of the local chamber of commerce. "It's not a sweetheart deal -- we need these jobs."

With the nation's fourth-highest unemployment rate last year -- and Walmart as its largest private employer -- South Carolina has worked hard to recruit new companies. The state boasts of its low unionization rates and regularly offers substantial tax breaks to corporations that relocate or open new factories here.

Amazon wasn't the first Seattle-connected company to take up South Carolina on those offers.

In 2009, Boeing announced it would build its new 787 production line in North Charleston, attracted by the nonunion workforce and an incentive package worth $353 million over 15 years. And Starbucks built a coffee-roasting plant in Calhoun County, which got a $2.25 million state grant to help make way for the facility.

The Amazon warehouse proved far more controversial. It wasn't the $5 million in free land or the property- or corporate income-tax breaks -- all viewed as the usual economic development enticements.

What angered opponents was the initially unpublicized pledge to Amazon by outgoing Gov. Mark Sanford's administration that the company would remain exempt from collecting South Carolina's sales tax.

That provoked a backlash from local retailers who said that amounted to favoring a giant out-of-state corporation over mom-and-pop stores.

"It creates an unlevel playing field for small businesses here in South Carolina that have paid taxes forever," said Buddy Delaney, who owns Best Mattress, a West Columbia store that's been in his family since 1928.

Even some local tea-party groups, despite their general anti-tax sentiment, opposed the deal as an insult to local businesses. "We just felt like it was really a matter of ... South Carolina's dignity," said Don Weaver, president of the South Carolina Association of Taxpayers.

This wasn't just a David vs. Goliath tale, though.

More like Goliath vs. Goliath.

As in the rest of the country, the fight in South Carolina became a proxy war between Amazon and some of its largest competitors.

The Alliance for Main Street Fairness, a national advocacy group funded in part by Walmart and Best Buy, stepped into the fray with radio ads and a