Amazon agrees to end NJ tax holiday, build sites

Associated Press Published: May 30, 2012
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TRENTON, N.J. (AP) — Amazon.com, the world's biggest online retailer, has agreed to collect 7 percent sales tax on purchases made in New Jersey starting next summer, the same time it plans to begin building two new distribution warehouses in the state.

The agreement, announced jointly by Gov. Chris Christie and Amazon executive Paul Meisner at the Statehouse on Wednesday, could bring thousands of construction jobs and 1,500 permanent positions at the warehouses. The collection of sales taxes, which online retailers like Amazon are not required to do now, will bring the state an estimated $30 million to $40 million a year in new revenue.

Amazon has not picked the locations for the warehouses. The retailer will be eligible for state economic assistance grants totaling millions on its investment of $130 million to build the warehouses.

"We're going to keep working and partnering with companies like Amazon to secure continued growth for our state and our families," Christie said in announcing the deal. "Each of (other companies') decisions to locate, stay or expand in New Jersey recognizes the concrete steps we've taken to improve our business climate, to create jobs and deliver tax relief and deliver new job opportunities to families in our state."

Amazon collects no sales taxes from New Jersey customers now, but would have been required to do so once the warehouses open. New Jersey residents who buy from Amazon are supposed to pay the sales tax themselves when they file their state income taxes, though few do.

The retailer has agreed to build job-creating distribution centers in Indiana, California, Tennessee and South Carolina in exchange for sales tax exemptions. It had requested a 22-month sales tax exemption in New Jersey.

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