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

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A new deal between the New Jersey government and Amazon will bring two of the company's distribution centers to the state. In exchange, Amazon won't be required to collect sales tax on its New Jersey orders until July, 2013.

amazon box stock 1020
amazon box stock 1020

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.