Amazon has been negotiating to open the distribution centers, but wanted a two-year tax holiday.
Brick-and-mortar retailers objected, saying Amazon would have a competitive advantage. They went to Trenton in March and asked lawmakers to require out-of-state Internet retailers to collect sales tax, just as Main Street businesses do under the law.
"There has been no bigger issue facing retailers than sales tax fairness," said John Holub, president of the New Jersey Retail Merchants Association. "We need to now use this event to continue the momentum and pressure Washington to finally resolve this issue for all Internet retailers once and for all."
Currently, Amazon does not collect sales taxes from New Jersey customers, although residents are supposed to pay the tax when they file tax returns. They seldom do.
The 7 percent sales tax is often the difference between a customer buying locally and ordering the product online. Customers often regard physical stores as showrooms and later make tax-free purchases online.
It’s a national issue. Growth in Internet sales and perceived tax-free shopping has caused even major electronic chains such as Best Buy to struggle. Best Buy announced recently it would close 50 stores nationwide.
Borders Group Inc. went out of business as more Americans made purchases on the Internet.
Christie urged members of Congress to support federal legislation, sponsored by U.S. Sen. Lamar Alexander (R., Tenn.), that would allow states to require all Internet-based retailers to collect sales taxes.
"This has been a long time coming, and whether it comes from an agreement such as this, or legislation, doesn’t matter," said Assemblyman Albert Coutinho (D., Essex). "What matters is the job creation and economic growth" and "fairness for N.J. businesses that have been competing against Internet retailers on an uneven playing field."
Paul Misener, Amazon vice president of global public policy, stood with Christie and said that "today is a great first start for the state of New Jersey. We’re really happy" to allow New Jersey "to get all the revenue available to it."
He estimated that 80 percent of all sales tax owed to the state "can only be accomplished through federal legislation." Amazon has opposed attempts by states to require out-of-state sellers to collect sales taxes owed, without congressional authorization.
Contact Linda Loyd at 215-854-2831 or lloyd@phillynews.com.
