TRENTON - A sales-tax exemption measure designed to encourage major online retailers to locate in New Jersey has been introduced in the Legislature.
The bill would help alleviate disparities between online retailers, who are not required to collect New Jersey's 7 percent sales tax unless they have a physical presence in the state, and bricks-and-mortar stores, according to Democrats.
"My goal and the goal of legislative leadership has always been to find a way to balance the interests of the retail merchants and the Internet merchants in a way that will ensure equity and a level playing field going forward," said Assembly Majority Leader Louis D. Greenwald (D., Camden), the driving force behind the measure.
Retail merchants' groups oppose the legislation because it continues a sales-tax exemption for online competitors, though only for a limited time.
Amazon.com, the world's biggest online retailer, is in talks to bring two warehouses to New Jersey in exchange for a delay in charging its Garden State customers sales tax. The deal could bring 1,500 full-time jobs to a state where unemployment has hovered around 9 percent. The legislation specifies that the jobs must go to New Jersey residents.
The legislation would allow Amazon to forgo New Jersey sales tax collections until September 2013 in exchange for its $65 million investment.
Amazon collects no sales taxes from Garden State customers now, but would be required to do so if it opened warehouses in the New Jersey. State residents who buy from Amazon are supposed to pay the sales tax when they file their state income taxes, though few do.
The retailer has agreed to build job-creating distribution centers in Indiana, California, Tennessee, and South Carolina in exchange for similar sales tax exemptions. It had requested a 22-month sales tax exemption in New Jersey.
The bill specifies that Amazon must hire union workers for construction jobs; encourage use of mass transit by employees; and make a five-year commitment. It would nullify the tax-collection exemption if the company sought other business incentive grants from the state.
If Amazon locates in the state, New Jersey stands to collect $200 million or more a year in sales taxes after the exemption ends.
The jobs created in the deal would pay an estimated $40,000 to $50,000 with health benefits.
Amazon is looking to take over existing office space. Each warehouse would be 1.2 million square feet.