If you're a New Jersey resident who buys things from Amazon without paying sales tax, those days are about to come to an end.
Gov. Chris Christie has reached an agreement with Amazon, the giant online retailer, that it will begin collecting the 7 percent NJ sales tax on items delivered to state residents starting in 2013.
The deal was announced at a joint press conference given by Christie and Amazon executive Paul Meisner, the Wall Street Journal reported.
The tradeoff for Amazon buyers in NJ is that the company said they'd build two new warehouses in the state at the same time tax collection begins, in July of next year. That will create construction jobs and as many as 1,500 warehouse jobs for state residents.
There was no mention about where the warehouses would be located.
The Amazon sales tax collection is estimated to bring in $30 to $40 million, but it's a bittersweet development.
"The good thing is that there will be construction and permanent jobs created. The bad thing is that they'll be charging sales tax," (D-19) said.
Vitale, who represents Woodbridge, said he understands how it could be a burden to state residents who will now join the 13 other states where Amazon made deals to collect sales tax.
"It's difficult to support additional taxes, but it's not a new tax. It's consistent with the law that has been around for all these years," Vitale said, referring to the state use law that requires New Jerseyans to report and pay in-state sales tax on out-of-state purchases, including Internet and mail order purchases.
Despite the state law, few people actually remit the tax themselves.
"It is what it is. I'm not happy about it," Vitale said about the potential taxes on NJ residents.
"In the long run, though, it'll work out for anyone. It's a long term equation. They'll pay property taxes, it's a free market thing," he said. "It's a little convoluted, but it works in the long run."
In addition to collecting sales tax in New Jersey, Amazon will be eligible for Economic Development Authority (EDA) tax incentives to build in the state. The deal announced yesterday is contingent on Amazon receiving tax incentives to finance construction, Philly.com reported.
A spokesman for Christie didn't think that the taxpayer-subsidized financial breaks were necessarily part of the Amazon deal.
"They can apply to the EDA for incentives like any other business," said Sean Conner, spokesman for the governor's office.