Amazon.com, the world's biggest online retailer, is in talks to bring two warehouses to New Jersey in a deal that could bring 1,500 or more full-time jobs to a state where unemployment has hovered around 9 percent.
Amazon.com, the world’s biggest online retailer, is in talks to bring two warehouses to New Jersey in a deal that could bring 1,500 or more full-time jobs to a state where unemployment has hovered around 9 percent.
State Assembly Democratic Leader Lou Greenwald, who has been involved in the talks, told The Associated Press Amazon is seeking a 22-month sales tax holiday, which is opposed by some retailers and at least one lawmaker.
The Seattle-based online retailer is not required to collect the 7 percent state sales tax for purchases like brick-and-mortar retailers do. That has led to what Greenwald and others believe is an unfair advantage for Internet-based sellers, because they can sell their products more cheaply than local merchants.
However, if Amazon opens the warehouses in New Jersey, it would have to collect taxes.
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“My goal and the goal of legislative leadership is 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 Greenwald of South Jersey.
The retailer has agreed to build job-creating distribution centers in Indiana, California, Tennessee and South Carolina in exchange for sales tax exemptions.
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-$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 declined to comment.
The Christie administration did not return messages for comment.
Sen. Ray Lesniak, a veteran Democrat, opposes giving the retailer a sales tax holiday.
“It’s a bad deal for New Jersey, no matter what,” he said. “We’re giving up hundreds of millions of dollars in revenues we should be getting and we’re also putting at risk jobs in our retail centers and central business districts throughout the state.”
Lesniak is sponsoring a bill requiring companies like Amazon to collect sales taxes in the state. He said the retailer is free to take advantage of other tax incentive programs New Jersey has in place to attract and retain businesses in the state.
However, Greenwald said Amazon appeared willing to forego those sweeteners in exchange for a limited-time sales tax exemption.
Some retail merchants also oppose a sales tax exemption for any length of time.
“Retailers across the state from Main Street to the malls want a level playing field immediately,” said John Holub, president of the New Jersey Retail Merchants Association. “The retail industry supports over one million jobs. While they can compete on price they can’t break the law and not collect the sales tax. We can’t afford to wait two more months, let alone two more years, for out-of-state Internet retailers to start collecting sales taxes.”
The law does not require online retailers to collect sales taxes unless they have a physical presence in the state. New Jersey residents who buy from Amazon.com are supposed to pay the sales tax themselves when they file their state income taxes, though few do.
Legislators, who would have to approve aspects of the deal, have been briefed on the talks, Greenwald said.
No votes have been scheduled.