New Jersey shoppers to pay tax on Amazon purchases starting next July

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Amazon will get a yearlong break from having to collect sales tax on its New Jersey orders. A new deal announced yesterday (May 30th) will see the company build two new distribution centers in the state, together worth about $130 million. In the US, an online retailer is required to collect sales tax in states where it has a physical presence, but this deal will let Amazon off the hook until July, 2013. New Jersey will be joining the likes of tax-collecting states Kansas, Kentucky, New York, North Dakota, Washington, and beginning in July of this year, Texas.

Garden State residents are currently supposed to keep track of the 7 percent sales tax on their online purchases and pay it themselves, but few likely go to the trouble. Having Amazon collect the tax is a big win for the state’s coffers — estimates are in the range of $30 to $40 million in extra revenue a year — although it's not clear what other incentives the company will seek from the state's Economic Development Authority.

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