Retailers shift their ad spending from TV, radio and print ads to digital ads.
The e-retailer and New Jersey have reached a deal that includes new warehouses.
Amazon.com 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.