Amazon to Collect Sales Tax in New Jersey Beginning July 1, 2013

Amazon has agreed to collect sales tax on purchases made by New Jersey customers starting July 1, 2013, or whenever federal legislation is passed.

New Jersey Governor Chris Christie made two Amazon-related announcements today, one of which included the collection of sales taxes beginning next summer.

This is a huge step for Amazon, considering the e-tailer fought many states that attempted to press tax collection on Amazon purchases. For instance, Amazon said it was closing one of its distribution centers and canceling operation expansions in the state of Texas last year because of a tax dispute with Texas Comptroller Susan Combs. According to Combs, Amazon was responsible for $269 million in uncollected sales taxes on online purchases.

Amazon fled many other states that attempted to force tax collection on the company as well, such as California and Illinois. Amazon has said that it does not have to collect sales tax because of a 1992 Supreme Court decision that excuses Amazon and other remote sellers from having to collect taxes in U.S. states that do not have the company’s employees or warehouses operating within those states. But between states looking for ways to offset large financial deficits and brick-and-mortar stores like Best Buy complaining about Amazon being unfair competition, Amazon is being pushed between a rock and a hard place.

However, Amazon CEO Jeff Bezos did say that his company would agree to collect taxes if there were some sort of federal legislation. This has not occurred yet, but Amazon continues to push for it while slowly agreeing to tax collection in certain states. Just last month, Amazon finally agreed to collect sales tax in Texas starting July 1, 2012. Amazon also agreed to start collecting sales tax on online items in California starting next year, and in Arizona in 2014.

Gov. Christie’s second announcement was the construction of two Amazon distribution centers within the state of New Jersey. These two new facilities will add up to $130 million in capital investment, and will create over 1,500 full-time jobs for New Jersey residents.

“In yet another positive sign in our state’s economic and job growth, I’m pleased Amazon is committed to helping New Jersey grow and create quality jobs,” said Christie. “After months of hard work and collaboration, Amazon has joined the long list of companies that recognize New Jersey’s economic and business climate is improving. We’ve created an atmosphere of job creation, growth and investment, which is why we’ve taken another important step toward placing quality, good-paying job opportunities within reach of our families.”

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