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New Jersey has mounted a well-publicized effort to attract a distribution center for Amazon.com Inc., but the online retail giant today announced it has chosen Delaware for the site of a new warehouse, leaving it unclear what the retailer's future in the Garden State may be.
Delaware's Economic Development Office announced the move in a press release, and said the warehouse will create 850 jobs in the First State.
According to the announcement, Delaware's EDO approved Amazon for $3.47 million from the state strategic fund in December, and a separate grant for up to $4 million has been awarded to improve infrastructure around the new site. Amazon also got a 10-year real estate tax abatement from Middletown, Del., as part of the deal. The Internet giant will spend $90 million to develop the 1 million-square-foot warehouse.
NJBIZ first reported on the state's effort to court Amazon in its Grapevine column.
But Amazon's demands — which reportedly included a 22-month sales tax holiday — were too high, a legislator said.
"It's obvious that Amazon wants to be greedy," said state Sen. Raymond Lesniak (D-Union). Allowing such a lengthy sales tax exemption "hurts New Jersey mom-and-pop stores and the retail industry in general."
The state of Delaware does not charge a tax on the sale of consumer goods, while New Jersey charges a 7 percent rate.
In January, Lesniak co-sponsored a bill that would require online companies like Amazon to collect sales taxes in New Jersey, in order to level the playing field between Internet shops and the state's brick-and-mortars. But Amazon wanted a 22-month sales tax holiday before investing $65 million to build a fulfillment center in the state.
"Companies that ignore the tax law are damaging the economy and destroying competition," Lesniak said. "While we will continue to aggressively offer incentives (to attract employers), New Jersey will lean strongly to make the Amazons of the world collect the (sales) taxes the law requires."
Clarification: An earlier version of this story reported Amazon was no longer considering New Jersey as a site for a warehouse.
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