SALT Report 1528 – New Jersey Governor Chris Christie announced that an agreement has been reached between the state and Amazon.com. According to the agreement Amazon will voluntarily begin to collect and remit New Jersey sales tax by July 1, 2013, or as of the effective date of federal legislation requiring out-of-state retailers to collect sales tax. This means New Jersey residents will no longer have the responsibility of tracking and reporting use tax owed for their online purchases from Amazon, and the state will receive the sales tax it is due.
As part of the deal, Amazon will begin constructing two fulfillment distribution centers in New Jersey in 2013. The distribution facilities are expected to result in at least $130 million in capital investment, along with the creation of several thousand jobs, which includes more than 1,500 full-time jobs, as well as thousands of full-time temporary, seasonal and construction jobs.
In return, Amazon will receive financial assistance from the New Jersey Economic Development Authority which has approved more than $1.5 billion in tax incentives for corporations that have promised to create jobs within the state.
The Governor’s announcement comes at a time when state tax revenues have fallen short of expectations. Last year New Jersey collected $7.76 billion in sales tax and Governor Christie estimates that the deal with Amazon would raise an additional $40 million annually. The additional revenue will help Christie fulfill a campaign promise to decrease income taxes by 10%.
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