Amazon To Collect Sales Tax, Build Distribution Center In New Jersey

One by one, the number of states where Amazon does not collect sales tax continues to shrink. New Jersey Governer Chris Christie has announced that the e-tail giant will not only begin collecting sales tax in the Garden State, but will also open a distribution center there.

According to the Newark Star-Ledger, Amazon won’t begin the collection of NJ sales taxes until July 1, 2013, so everyone in the state has a year to keep track of their Amazon purchases to make sure they are paying taxes on them when they file their return next spring.

Amazon and the state have already been in talks about working together to construct two 1.2 million sq. ft warehouses in NJ, most likely in the central New Jersey counties of Middlesex or Mercer.

“That’s OK, but it doesn’t mean a lot unless it actually happens,” said one skeptical lawmaker.

The New Jersey deal isn’t dissimilar to the one Amazon made with Texas. There, the company said it would make about $200 million worth of capital investments and create about 2,500 jobs.

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

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  1. homehome says:

    I give it 5 to 10 years, that no amazon tax thing will evaporate

  2. rockelscorcho says:

    there is always a loop hole..always.

    • Geekybiker says:

      For now its using something like google shopping and just buying from someone not in NJ.

  3. dolemite says:

    “”That’s OK, but it doesn’t mean a lot unless it actually happens,” said one skeptical lawmaker.” “I don’t know who this “Amazon” is, but I’ll put my money on real ‘merican companies like Best Buy”, the lawmaker was heard saying. Later, he looked up the word “internet” in a dictionary in his study.

  4. chizu says:

    Biggest sad face.

    I do not want to pay sales tax from Amazon, but I’d say the jobs are most definitely welcome in this area. I have a feeling it might actually be in Middlesex (there are tons of distribution centers in the area). I guess the upside is that I might end up getting my order from Amazon within a day or two even without Amazon Prime…

    • Marine2531 says:

      Middlesex and Mercer counties are both sh*tboxes, so it’ll be a huge help to either one.

      • chizu says:

        If they build the distribution center in either one county, it probably will benefit both since commute between the two isn’t so great to the point that it would discourage people from applying.

        • RvLeshrac says:

          It’l help. Like the Kia plant down here in GA/AL. The one where tens of thousands of people applied on the first day for a few hundred open positions.

          Which is to say, it won’t actually do much of anything unless those jobs pay enough for families to go out and spend lots of money on local businesses.

          Since we know they’ll most likely pay Wal-Mart wages, it won’t help the communities at all in the long-term.

      • justabunchofwords says:

        As a former Middlesex and current Mercer resident, I’d like to say that you have no idea what you’re talking about. Care to give some examples of why those counties are “sh*tboxes”?

  5. ARP says:

    They won’t have to pay property tax (and may even get TIF money), they’ll collect sales tax from NJ consumers and Christi can say brought jobs to NJ, even if its at a net loss.

  6. dush says:

    So if you live in a state with no sales tax and you buy something online from a New Jersey business you don’t have to pay sales tax on that purchase right?

    • IGetsAnOpinion says:

      Nope – they tax on delivery state. Same if you physically bought something in NJ that was to be delivered to you in Delaware. It’s not supposed to be taxed (though I will bet $$ they would screw that up)

  7. absherlock says:

    Why not build in Delaware where there is no sales tax? They get warehouses in the same tri-state area, they get to keep their competitive advantage and they still don’t have to collect Jersey sales tax.

    • IGetsAnOpinion says:

      They did open one in Delaware too (or are in the process of doing so).

    • sn1per420 says:

      Because that sales tax is effectively funneled right back to them. They’ll get some massive tax breaks/credits in exchange for “creating jobs” in NJ, which will be paid for by Amazon customers from NJ in the form of sales tax.

      Christie gets to claim he brought jobs to NJ, amazon gets more money: “everybody” wins!

    • Powerlurker says:

      Amazon has had a warehouse in New Castle, DE for ages.

  8. Cooneymike says:

    They are building the distribution center there as part of a deal where NJ refunds all collected sales tax to Amazon as part of the development agreement. NJ gets a distribution center and 2500 jobs out of this where they would have gotten nothing otherwise. Amazon gets a distribution center they need anyway paid for by the taxpayers of NJ. They all win, except the taxpayers of NJ who now have taxes collect on their Amazon purchases and can’t ignore that requirement like everyone else does.

    • chizu says:

      I actually didn’t realise that — that would explain the whole “financing” thing with EDA. Sometimes NJ tries too hard to attract big businesses to set up in the state, but in the end, screwing a lot of people over.

  9. mikedt says:

    Nooooooooooooooooooooo!

  10. josephbloseph says:

    Again, it’s never been about avoiding paying the 5% or whatever in taxes, it’s about the 25-70% of list price of what I buy from Amazon. I’m perfectly fine and comfortable with the idea of paying my taxes.

  11. IGetsAnOpinion says:

    Glad I moved out of NJ!

    • pgr says:

      And you don’t have a fat, ignorant, no class pig as a guv, either!

      • Maltboy wanders aimlessly through the Uncanny Valley says:

        Since when did Bawney Fwank become governor?

    • GuyGuidoEyesSteveDaveâ„¢ says:

      You will have few places to move, as Amazon collects tax in a lot of states now, and it’s growing.

  12. Morac says:

    Oh well it was a nice free ride while it lasted. I don’t suppose having a huge distribution center within 30 miles of where I live means I can get what equates to free next day shipping? I might let my Amazon Prime lapse.

    • HenryES says:

      Probably not, I think part of why your Prime orders get to you so fast is that they ship them out faster. Before I had Prime, it would often take a couple of days just for the item to leave the warehouse.

    • mischlep says:

      I get most of my Newegg shipments next day via UPS. Newegg has a distribution center in Edison, NJ.

      This will just save me a little aggravation at tax time where I look back at my Amazon purchases and decide which ones I have to count for NJ use taxes.

    • ahecht says:

      Amazon times that stuff carefully to make prime seem like a better value. When my non-prime FSSS packages come from a far-away warehouse they ship out within 24 hours, but packages coming from the distribution center two towns over don’t ship for a week.

  13. krom says:

    You do realize that — like mail order back in the day — the REASON they are collecting tax in NJ is BECAUSE they are opening a distribution center there.

    This phenomenon is older than dirt. Fingerhut and Sears and those film-processing-by-mail operations of yore all had to do the same thing. If they had a distribution or processing center in your state, you had to pay sales tax. (The forms would say at the bottom, e.g. “KS residents add 5% sales tax.”) Usually, it was only one state, sometimes two, rarely 3 or 4.

    The only reason the number of states with Amazon sales tax are going up is because Amazon is opening more distribution centers in different places, so as to make processing and shipping more efficient (and faster delivery time).

  14. Extended-Warranty says:

    I can’t for the life of me figure out what Amazon is trying to accomplish with all of these distribution centers.

    If it’s to lower shipping costs, extra labor and warehouses don’t save you a whole lot, as you still have to pay to ship. If it’s to shorten shipping times, then you’re ordering a LOT of extra inventory to a lot of different centers. At that point, you might as well open up a retail store.

    • Browsing says:

      Perhaps to stop paying other companies to distribute for them. I know of one company in Somerset, NJ that fulfills Amazon orders. I’m also pretty sure I’ve been paying tax for the last few months on Amazon orders to NJ.

  15. mbz32190 says:

    I live in PA and I’m really shocked that they haven’t started to collect taxes in my state, as Amazon has multiple warehouses in the area. Even if they did, items are still cheaper than any other retail store. With Prime 2-Day shipping, it seems I get most of my orders the very next day if I order early enough and it isn’t coming from a 3rd party.

    • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

      Um, I’m a PA resident too – there’s a line on the PA 40 where you are supposed to enter the amount of sales tax you weren’t charged for online purchases. It’s on the second page, toward the middle.

    • HomerSimpson says:

      It’s coming (towards the end of the year I think)

  16. Crank says:

    Also Indiana.

  17. shthar says:

    Has anyone ordered anything off of amazon and not had to pay tax in the last 5 years?

    • Morac says:

      That’s kind of a trick question. Legally, if the seller doesn’t collect the tax, you are supposed to report all purchases on your state’s tax form (assuming your state has a sales tax).

      That said, Amazon has never collected taxes on any of my purchases (I’m in NJ). That, plus convenience, is the main reason I use them. Also Apple (iTunes) collects taxes here, while Amazon does not, which made Amazon’s digital downloads cheaper that iTunes (they usually are cheaper anyway). All that changes next year.

  18. skakh says:

    Governer Chubby raising taxe revenue from those who can least afford them.

    • Bsamm09 says:

      Should have been paying the tax anyway so this shouldn’t affect anyone other than tax cheats.

  19. soj4life says:

    Well this is interesting. I live in Delaware and they have a center in New Castle, they are also building a second one in Middletown. I know this center is mostly because of NY and the shipment of goods into Elizabeth, but the work of this center is going to come from another state’s warehouse.

  20. gspdark1 says:

    Amazon can only collect sales tax if a state has a nexus within it’s sales tax code. Perhaps PA doesn’t have a nexus law in the books.