NJ Legislators Hope to Woo Amazon to New Jersey
TRENTON, N.J. (AP) — Legislation designed to encourage major online retailers like Amazon.com to locate in New Jersey has been introduced.
The bill would help alleviate disparities between online retailers, who aren’t required to collect New Jersey’s 7 percent sales tax unless they have a physical presence in the state, and those operating out of storefronts, Democrats told The Associated Press.
“My goal and the goal of legislative leadership has always been to find a way to balance the interests of the retail merchants and the Internet merchants in a way that will ensure equity and a level playing field going forward,” said Assembly Majority Leader Lou Greenwald of Voorhees, the driving force behind the measure.
Retail merchants groups oppose the legislation because it continues a sales tax exemption for online competitors, even for a limited time, while retailers are required by law to collect the tax.
The AP reported earlier this month that the world’s biggest online retailer was in talks to bring two warehouses to New Jersey in exchange for a sales tax holiday. The deal could bring 1,500 full-time jobs to a state where unemployment has hovered around 9 percent. The legislation specifies that the jobs go to New Jersey residents.
The legislation would allow Amazon to forego sales tax collections until September of 2013 in exchange for its $65 million investment.
Amazon collects no sales taxes from New Jersey customers now, but would be required to do so if it opens warehouses here. 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 Jersery.
The bill specifies other conditions for Amazon. It must hire union workers for construction jobs; encourage use of mass transit by employees; make a five-year commitment; and would nullify the tax collection exemption if the company seeks other business incentive grants from the state.
New Jersey stands to collect $200 million or more a year in sales taxes if Amazon locates there, after its exemption ends.
The jobs the deal would create would pay an estimated $40,000 to $50,000 with health benefits.
Amazon is looking to take over existing office space in two locations. Each warehouse would be 1.2 million square feet.
Amazon spokesman Braden Cox didn’t immediately return a message seeking comment Tuesday.
The bill has been referred to the Assembly Budget Committee for a hearing.
Copyright 2012 The Associated Press.