Amazon, Christie reach compromise on sales tax collection
Amazon.com will invest $130 million to construct two 1.2 million-square-foot fulfillment distribution centers and create 1,500 full-time jobs in New Jersey next year, Gov. Chris Christie announced today, also noting the retail giant will begin to collect tax on Garden State sales.
Christie said he anticipates the company will apply for financial incentives through the state Economic Development Authority to build the warehouses; “the sooner they get to work on that, the sooner we can get people back to work.”
Christie said Amazon will begin collecting sales tax on July 1, 2013. Paul Misener, vice president of global public policy for Amazon, said the company’s entire retail family, including affiliates like West New York-based eCoupons.com, will have to collect sales tax, as well.
When the agreement to collect sales tax goes into effect next year, Christie expects the state to collect between $30 million and $40 million in additional sales tax revenue from Amazon and its affiliates.
“These are common-sense tax changes that help create jobs for our citizens,” Christie said. Christie said the “negotiations with Amazon.com change our tax policy to compete” with other states.
Assemblyman Albert Coutinho (D-Newark) said the Christie administration’s partnership with Amazon highlights the differences between how Trenton and Washington handle the issue of online retailers collecting sales tax.
“We’ve enjoyed working through the legislation to get this done, and it allows us to focus on federal legislation to remove the sales tax issue and give New Jersey all the tax revenue available to it,” Misener said. “I look forward to working with the state’s leadership to get federal legislation passed in Washington, D.C.”
Christie today joined a growing list of governors supporting federal nexus legislation that would grant states the authority to enforce sales tax and use laws on all retailers doing business in their state, including online retailers and their affiliates.