Bloomberg News

N.J. Assembly Approves Sales-Tax Break to Lure Amazon Center

March 15, 2012

The New Jersey (STONJ1) Assembly approved an estimated $40 million in sales-tax breaks designed to bring Amazon.com Inc. (AMZN) to the state, and a lawmaker is working on a similar deal in the Senate.

Amazon, the biggest online retailer, is seeking to build two distribution centers in New Jersey, Pennsylvania or Delaware, according to the bill’s sponsor, Assemblyman Albert Coutinho, a Newark Democrat. New Jersey would suspend sales-tax collections through June 30, 2013, so long as Amazon makes a capital investment of at least $130 million and hires no fewer than 1,500 full-time workers.

The legislation, approved 70-7 with two abstentions in the Democratic-controlled Assembly, would apply to Internet retailers with buildings in the state. The U.S. Supreme Court (1000L) has ruled that online sellers must collect sales taxes in states where they have a physical presence, and Seattle-based Amazon has none in New Jersey.

Coutinho estimated the break for Amazon alone at $40 million. An earlier version of the bill had sought an investment of $65 million or more.

The Senate, also with a Democratic majority, has yet to take up the measure and send it to Governor Chris Christie, 49, a Republican midway through his first term.

“There’s not a meeting of the minds right now between Amazon and both houses,” Senator Ray Lesniak, a Democrat from Elizabeth and bill sponsor, said in an interview in the Statehouse before the Assembly voted.

Christie’s View

Lesniak said he is trying to broker an agreement between Senate members and corporate officials. Mary Osako, a spokeswoman for Amazon, said the company declined to comment.

Christie told reporters during an appearance at Bordentown Regional High School March 12 that he wouldn’t express an opinion on the bill until it comes to his desk. He said his staff has been working with legislative employees on the matter.

“I do in principle believe that it makes sense for us to encourage companies to come here and spend a significant amount of money on buildings and infrastructure and create jobs,” Christie said.

California Governor Jerry Brown signed a bill in September giving Amazon a similar one-year reprieve from sales taxes.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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