Amazon.com to begin collecting sales tax on N.J. orders next year

[MCA™]

One step closer to same-day delivery.


Amazon's prime location: Business experts say distribution hub in Mercer is ideal
By Mike Davis/The Times
on January 09, 2013 at 10:06 AM, updated January 09, 2013 at 10:08 AM

ROBBINSVILLE — Amazon.com will begin operating a 1 million-square-foot warehouse in the township early next year, creating an estimated 700 full-time jobs and generating more than $22 million in tax revenue for Robbinsville and Mercer County.

The warehouse, the first of two fulfillment centers the online retailing giant has said it will open in New Jersey, will be built at Matrix Business Park at 7A, off exit 8 on Interstate 195. Warehouse employees will pick, pack and ship smaller items, including books and DVDs.

“Phase one of Amazon’s new state-of-the-art fulfillment center in Robbinsville will spur growth and investment for the Garden State and our local economies while bringing meaningful job creation opportunities for New Jersey’s families,” Gov. Chris Christie said in a news release.

The announcement had long been expected as township officials negotiated a property tax deal with a warehouse builder that works with Amazon. The location will give the retailer easy access to I-195 and the New Jersey Turnpike, allowing it to get products to customers faster.

“In real estate, it’s location, location, location,” Mayor Dave Fried said. “We already have a great location, with I-195 and Turnpike access right near each other. You can go north, south, east and west very easily.”

Read more

[MCA™]

So this is why Amazon finally gave up fighting the sales tax. Be careful what you wish for, brick-and-mortar stores.


I Want It Today
How Amazon’s ambitious new push for same-day delivery will destroy local retail.
By Farhad Manjoo|Posted Wednesday, July 11, 2012, at 5:53 PM ET

Amazon has long enjoyed an unbeatable price advantage over its physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company is required to collect local sales tax from me, so I pay almost $1,100 at checkout. In most states, Amazon is exempt from that rule. According to a 1992 Supreme Court ruling, only firms with a physical presence in a state are required to collect taxes from residents. Technically, when I buy a $1,000 laptop from Amazon, I’m supposed to pay a $100 “use tax” when I file my annual return with my home state of California. But nobody does that. For most people, then, most items at Amazon are significantly cheaper than the same, identically priced items at other stores.

In response to pressure from local businesses, many states have passed laws that aim to force Amazon to collect sales taxes (the laws do so by broadening what it means for a company to have a physical presence in the state). Amazon hasn’t taken kindly to these efforts. It has filed numerous legal challenges, and fired all of its marketing affiliates in Colorado, North Carolina, Rhode Island, and California. It also launched a $5 million political campaign to get voters to turn back the California law. And when Texas’ comptroller presented Amazon with a $269 million sales tax bill last year, the company shut down its distribution center in Dallas.

But suddenly, Amazon has stopped fighting the sales-tax war. Last fall it dropped its repeal campaign in California and instead signed a deal with lawmakers to begin collecting sales taxes later this year. That was followed by several more tax deals—over the course of the next couple years, Amazon will begin collecting sales tax from residents of Nevada, New Jersey, Indiana, Tennessee, Virginia, and on July 1, it began collecting taxes from Texans. It also currently collects taxes from residents of Kansas, Kentucky, New York, North Dakota, and its home state of Washington. After all the tax deals go into effect, the company will be collecting taxes from the majority of its American customers.

Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times’ Barney Jopson reports that Amazon’s tax capitulation is part of a major shift in the company’s operations.
Amazon’s grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states. When I order stuff from Amazon, for instance, it gets shipped to California from one of the company’s massive warehouses in Kentucky or Nevada.

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy.

It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.

[...]

Physical retailers have long argued that once Amazon plays fairly on taxes, the company wouldn’t look like such a great deal to most consumers. If prices were equal, you’d always go with the “instant gratification” of shopping in the real world. The trouble with that argument is that shopping offline isn’t really “instant”—it takes time to get in the car, go to the store, find what you want, stand in line, and drive back home. Getting something shipped to your house offers gratification that’s even more instant: Order something in the morning and get it later in the day, without doing anything else. Why would you ever shop anywhere else?

Full article is here

[TheFang]

Amazon hardly gives a dime to the state of Washington, where they are truly located, so I wouldn't hold my breath.

[Bobblehead]

Because I don't trust UPS to deliver anything to my house, I've been having packages shipped to NYC for years, so no big deal for me.

Amazon should use some of that money to pay for air conditioning in their distribution centers, though.

[Soshin]

Oh Amazon, you might just want to spend some of those 7 billion pounds in UK sales you never paid taxes on to set up shop and stop raiding the state coffers.

[MCA™]

Amazon.com to begin collecting sales tax on N.J. orders next year
Published: Wednesday, May 30, 2012, 3:21 PM
Updated: Thursday, May 31, 2012, 6:14 AM
By Matt Friedman and Jarrett Renshaw/Star-Ledger Staff

TRENTON — Online retail giant Amazon.com plans to build two huge distribution centers in New Jersey, creating what Gov. Chris Christie said today will be 1,500 full-time jobs. But New Jerseyans intent on buying a big-screen TV or laptop computer should act quickly: Come July 2013, Amazon will start collecting a 7 percent state sales tax — whether or not the sprawling warehouses are built.

"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.

Amazon and other out-of-state online retailers currently do not collect the 7 percent sales taxes from New Jersey customers that in-state merchants are required to charge. Although residents are supposed to pay the levy when they file their income tax returns, few do. Christie said that although forecasts differ on how much sales tax revenue the state will bring in, he put a "safe estimate" at $30 million to $40 million.

At the same time, the Seattle-based company plans to apply for tax incentives from the state Economic Development Authority, but its officials did not say how much they would seek.

"Certainly we’re going to have to work out the economic development arrangements," said Paul Misener, Amazon’s vice president for global public policy, who attended today’s news conference.

Amazon has been involved in talks with state officials for months, first with legislators and then with members of the Christie administration, to open the facilities in New Jersey, but the decision was delayed while the company sought a two-year sales tax holiday. A bill to let Amazon hold off on charging the sales tax was approved in the Assembly but stalled in the Senate. Sponsors of the measure said today the effort was now moot.

"We need jobs, economic growth and a level playing field, and we get all three with this agreement," Assemblyman Al Coutinho (D-Essex), a sponsor of the measure to delay the sales tax, said.
 
Video: Governor Christie Welcomes Amazon To New Jersey

Misener said the proposed warehouses, each about 1 million square feet, are large enough to house 25 football fields. Similar centers drew critical media attention after a Pennsylvania newspaper reported temperatures led workers to faint and suffer other heat-related ailments. "We’ve taken it upon ourselves to invest over $50 million in new air-conditioning equipment so that circumstance can never happen again," he said.

Christie and Misener both called for enactment of a federal bill to allow states to charge sales tax on purchases made from out-of-state retailers. Misener said the company has not decided where the distribution centers will be situated, though similar facilities are clustered near Exit 8A of the Turnpike.

John Holub, president of the New Jersey Retail Merchants Association, called the agreement "great news" because "there’s been no bigger issue facing retailers than sales tax fairness and we now have a definitive date at which Amazon can no longer exploit this loophole." But Holub also expressed concern that other online retailers aren’t bound by the agreement. "There are a whole host of internet-only retailers that will exploit this loophole," he said.

Gordon MacInnes, president of New Jersey Policy Perspective, a progressive research organization — which has been critical of the state for offering so many tax incentives to lure companies — said he needed more details about the agreement but felt positively about its outlines.

"If I were a member of the Legislature and the deal was presented as I read it today, I would vote for it," MacInnes said, adding that "this looks like a deal that is closer to the intent of granting those incentives than most that have been struck in the last two years."

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