Amazon to Collect NJ Sales Tax Starting July 2013

On May 30, New Jersey Gov. Chris Christie announced that that the state had come to an agreement with Amazon.com that will have the retailer begin collecting and remitting state sales tax in exchange for opening two new warehouses in New Jersey. Amazon.com already has subsidiaries in the state, including Audible and Quidsi.The deal requires that the online giant begin collecting as of July 2013.

“This issue is about fairness, by requiring online retailers with billions of dollars in annual sales to play by the exact same rules as local stores like mine that line our town’s family-friendly main street,” Jonah Zimiles of Words [1] in Maplewood, New Jersey, said, as reported by Patch.com [2]. “Words bookstore is not merely a shop selling books, but an active and integral part of Maplewood. As a result of today’s major development, we hope that small independent retailers in New Jersey will be able to continue to serve our communities.”  

John Holub, president of the New Jersey Retail Merchants Association, noted in a release: “There has been no bigger issue facing retailers than sales tax fairness, and we need to now use this event to continue the momentum and pressure Washington to finally resolve this issue for all Internet retailers once and for all.”

At yesterday’s press conference, Gov. Christie said the two warehouses will bring 1,500 full-time jobs to the state, as reported by the New Jersey Star-Ledger [3]. “We will now in the state of New Jersey begin collecting sales tax at least from a fraction of the market we otherwise would not have gotten,” Christie said at a Statehouse news conference, adding the deal would also lead to “thousands” of part-time, seasonal, and construction jobs. The governor said that the deal could bring in sales tax revenue of between $30 million to $40 million.

Christie also stated that he supports a federal solution to sales tax fairness. “I just want to make clear that I have been working on this issue in my role on the executive committee of the National Governors Association because it is an important issue to all the nation’s governors,” he said. “And I too — along with governors like Governor Daniels and others —urge the federal government and the Congress in particular to get behind Senator Lamar Alexander’s legislation [the Marketplace Fairness Act] to allow states to be able to make these choices for themselves…. It would give states options to decide how they want to deal with this and not have to any longer deal with the federal prohibition on dealing with it.”

Christie said he hoped there would be a resolution on this issue by the end of the year.