May 30, 2012, 4:17 PM

Amazon’s new tax deal

The e-retailer and New Jersey have reached a deal that includes new warehouses.

Thad Rueter

Senior Editor

Lead Photo Inc. will start collecting sales taxes next year for purchases made by New Jersey residents, Gov. Chris Christie said today.

The agreement calls for the retailer, No. 1 in the Internet Retailer Top 500 Guide, to begin collecting taxes on July 1, 2013, and for Amazon to build two warehouses in New Jersey. Amazon has similar deals in other states, including Virginia, Indiana and Tennessee.

"Today’s announcement marks a first step toward a long-term relationship with Amazon," New Jersey Gov. Chris Christie said in announcing the deal at a press conference. Also speaking was Amazon vice president of global public policy Paul Misener who said the e-retailer would explore further opportunities to expand in New Jersey. "We have a history of growing in the states that have welcome us," Misener said. Among those favored states has been Kentucky, where Amazon operates four fulfillment centers and recently announced plans for a customer service facility. Amazon has collected sales tax in Kentucky since 2005.

Christie said Amazon’s new fulfillment centers will bring some 1,500 full-time jobs to the state as well as thousands of seasonal and part-time jobs. The investment in the warehouses could amount to $130 million, he said. "I’m pleased Amazon is committed to helping New Jersey grow and create quality jobs,” Christie says.

The general sales tax rate in New Jersey is 7%, according to the state’s taxation division. As is the case in many other states, New Jersey residents are already required to remit taxes for online retail purchases, though state officials have said few shoppers do so.

Christie today said it was likely that Amazon would seek financial assistance from the state’s Economic Development Authority to pay for the new warehouses.

In its previous deals with other states Amazon promised to work to support proposed federal legislation that would require more online retailers to collect sales tax. Under existing federal law, states can only require sales tax collection by retailers who have a physical in-state presence like stores or distribution centers.

Comments | 2 Responses

  • Well, If is the No.1 internet retailer and can give 1,500 full time jobs to the state, then it's fair enough that they will start collecting sales taxes. As a customer I would understand because since before they never asked for these taxes. Thanks for this information. - Lisa

  • Will these be full time jobs as Amazon employees with benefits paid by Amazon and opportunities for advancement within the company? Or will they be full time jobs working for a temp agency? I am a strong supporter of temp jobs and the opportunities they give workers to learn new skills and try different career paths. For someone entering or reentering the work force it is a good deal and also gives an employer a safe way to find new full time employees (once the employee has completed his or her contract obligations to the temp company.) That said, I hope Amazon will be required to hire 1500 new employees directly and not through a temp agency. It would be a good faith gesture as it is very easy to terminate or let a temp go, vs a full time employee. Temp workers would be appropriate for times when the normal work force is not sufficient and there is a temporary need to bring in more workers (November and December.) Full time workers would have a voice in the company and could be a group that would speak up if Amazon was not treating them properly.

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