New Jersey mulls giving Internet retailers with physical presence in state US$40M sales-tax break if they invest at least US$65M, create 1,500 or more jobs; retailers would collect sales taxes from state residents beginning in July 2013

Cindy Allen

Cindy Allen

Mar 13, 2012 – Industry Intelligence

LOS ANGELES , March 12, 2012 () – In a bid to lure Inc. to New Jersey, the state legislature is considering giving Internet retailers with a physical presence in the state a US$40 million sales-tax break if they invest at least $65 million create and create 1,500 or more jobs, Bloomberg reported March 9.

Under the measure, which is currently pending, Internet retailers would collect sales taxes from state residents beginning in July 2013, providing them with a one-year tax break.

State lawmakers are hoping to pass the measure by March 15.

Amazon is considering building two distribution centers in New Jersey.

“The state has a lot to lose here,” Economic Growth Committee Chairman Coutinho, “This is an opportunity to have a major online retailer establish two distribution centers here, create over 1,500 jobs and make a $100 million investment.”

Democratic Assembly Majority Leader Louis Greenwald said that he had talked with local Amazon lobbyists and Amazon officials about the proposed sales-tax emption.

Amazon spokesperson Scott Stanzel declined to comment both on the proposed tax-break legislation and on whether or not Amazon had entered into discussions with New Jersey.

According to a ruling by U.S. Supreme Court, Internet retailers must collect sales taxes in those states in which they have a physical presence.

In September, California passed a similar law that would give Amazon a one-year reprieve from its obligation to collect sales taxes from state residents.

The primary source of this article is Bloomberg, New York, New York, on March 9, 2012.

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