Amazon to Bring Jobs to New Jersey With New Distribution Facilities
Brick-and-mortar retailers won’t have the price disadvantage they now have compared with online sellers after New Jersey Gov. Chris Christie recently reached an agreement under which Amazon would collect sales taxes on his state’s online purchases in exchange for locating distribution facilities there.
Conservative governors, joining Democratic leaders have been making deals with online retail giant Amazon.com to collect state sales taxes, reported the Wall Street Journal in an article Monday.
Retailers have had a 5% to 10% price disadvantage compared with online rivals, with some customers using its stores to shop products and then ordering them online to avoid paying sales tax.
Gov. Christie called taxation of online sales “an important issue to all the nation’s governors” and endorsed federal legislation giving all states taxing authority.
One of the co-sponsors, Sen. Dick Durbin (D., Ill.,) said “It gets down to a basic issue… of simple fairness for small businesses that create jobs and opportunities all across America.”
In May Gov. Christie announced that the online retailer wouldn’t charge the state’s 7% sales tax until July 2013 in exchange for bringing an estimated 1,500 full-time jobs to New Jersey, as well as “thousands” of seasonal, part-time and construction jobs, reported the Journal.
Amazon also received some standard economic-development tax incentives.
Other states with Republican governors that have also announced similar deals are Virginia, Texas and Nevada.
However, Florida officials recently rejected Amazon’s attempt to negotiate a pact to locate facilities and up to 3,000 jobs there in exchange for deferring sales-tax collection until January 2014.
“Amazon knows its days are numbered before a federal law is passed and came down here to make a fast deal,” said Rick McAllister, president of the Florida Retail Federation.
“Amazon’s Holy Grail is to do same-day delivery to compete with our brick-and-mortar stores, but we let the governor’s staff know the unfairness for it to avoid sales taxes for two Christmas seasons,” continued McAllister.
Amazon will pay sales tax in at least 13 states by 2014, covering nearly half of the U.S. population.