Amazon and Florida make a deal on sales tax

Amazon says it will spend $300 million on new facilities in the state.

Paul Demery

A month ago, Florida Gov. Rick Scott, a Republican, announced that his state had rejected an offer by Amazon.com Inc. to build distribution centers in the state in exchange for a temporary reprieve from having to collect sales tax from Florida customers.

But yesterday the state and Amazon, No. 1 in the Internet Retailer 2013 Top 500 Guide, announced that they had reached an agreement. The world’s largest retailer by web sales says it plans to “create more than 3,000 new jobs and over $300 million in investment in Florida,” according to Paul Misener, Amazon’s vice president of global public policy.

Neither Florida nor Amazon clarified when Amazon will begin collecting sales tax in Florida.

Misener adds that Amazon at the same time will lobby for passage of the federal Marketplace Fairness Act, which was passed by the U.S. Senate in March and is designed to authorize states to mandate collection of sales tax by Internet and catalog retailers that do at least $1 million a year in remote sales. Amazon has said that it believes the federal law, currently before the U.S. House of Representatives, will provide for a fairer system of tax collection by online retailers.

Under existing federal law, states can only mandate tax collection by states with an in-state physical presence, such as stores or distribution centers. Amazon, which in the past had opposed a new federal law on sales tax collection, started to support it in recent years as it has been expanding its number of distribution centers across multiple states. The retailer already collects sales tax in Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas, Arizona and in its headquarters state of Washington. It has agreed to begin collecting sales tax in Connecticut in November in Connecticut, where it is building distribution facilities, and has deals to begin collecting sales tax in other states including New Jersey, Texas and California.


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