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Atlanta’s Chance to Win Amazon’s HQ2 May Have Just Taken a Big Hit

Atlanta is now on a short list of 20 candidates to become the home of Amazon’s second headquarters, known as HQ2. The city is likely near the top of the list, thanks to its mix of talent, geography, and affordability – but recent moves at the state level in Georgia could seriously threaten its bid.

The Georgia legislature on Thursday approved a bill stripping a $50 million sales tax exemption from the airline, which is headquartered in Atlanta. Governor Nathan Deal is reportedly prepared to sign the bill into law. The move came in retaliation for Delta’s decision last week to cancel a discount program with the NRA amid a growing political furor over gun control. Delta’s CEO on Friday responded, stating in part that “our values are not for sale,” while claiming that Delta was mostly trying to distance itself from the gun debate.

The spat would give any corporate giant pause when considering a base of operations. Experts speaking to CNN before the tax repeal passed said the fight showed Georgia’s government was more concerned with social policy than business, and that Georgia’s political climate could harm Amazon’s recruitment efforts.

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The fight may be especially worrying for Amazon because of its leadership’s frequent willingness to wade into politics directly. CEO Jeff Bezos has been harshly critical of President Donald Trump’s efforts to curb immigration, and has previously funded same-sex marriage activism. Bezos also owns the Washington Post, an often overtly liberal publication. While that worldview is shared by many Atlanta residents, the state as a whole is more politically divided, suggesting the real possibility of future strife.

The situation highlights a broader dynamic that should be worrisome to all businesses – the growing cultural and economic gaps between dynamic, largely liberal cities like Atlanta and Charlotte, and their more-conservative states. An inflammatory ‘bathroom bill’ passed by North Carolina in 2016 cost Charlotte millions of dollars in economic activity when organizations including the NBA cancelled events there.

Atlanta losing a shot at Amazon’s headquarters because of state legislation would represent a replay of that dynamic on a vastly larger scale. And that’s not all Atlanta has to worry about – politicians from Virginia, New York, and Ohio have all reached out to invite Delta to relocate their headquarters. That’s extremely unlikely, but speaks to just how much damage could follow from Georgia’s use of tax policy to side with the NRA against business.