N.J. Intros Amazon-Friendly Bill

By Alan Wolf -- TWICE, 2/21/2012

Trenton, N.J. - A bill was introduced in the New Jersey State Assembly today that would exempt online retailers with facilities in the Garden State from collecting sales tax until September 2013.

The measure is ostensibly aimed at Amazon.com, which has reportedly held discussions with state legislators over opening two distribution centers here in exchange for a short-term tax moratorium.

According to the News Record, the bill exempts e-tailers from collecting the state's 7 percent sales tax on transactions made by New Jersey residents until Sept. 1, 2013, if they make a $65 million capital investment here and create at least 1,500 full-time jobs.

The legislation, introduced by Assembly Democrats, would also update rules regarding sales tax collection by e-tailers with affiliate merchants located in the state.

"My goal and the goal of legislative leadership has always been to find a way to balance the interests of the retail merchants and the Internet merchants in a way that will ensure equity and a level playing field going forward," Assembly Majority Leader Lou Greenwald told the newspaper. "I believe this plan accomplishes that goal with the added benefit of 1,500 new jobs, economic growth and smart provisions that protect taxpayers. This bill is a great step forward for New Jersey's economy."

But the Alliance for Main Street Fairness (AMSF), a lobbying group created by some of the country's largest retail chains that seeks to eliminate e-tailers' tax advantage, argued that Amazon is "refusing to play by the same rules as other retailers in the state," and that the 22-month sales tax holiday it seeks will cost New Jersey $317 million a year.

AMSF also quoted Debbie Schaeffer, owner of Mrs. G's Appliances in Lawrenceville, N.J., who said, "As the owner of a 77-year old family-run store that employs 20 hard-working people, this sales tax fairness issue is one of the most important issues affecting our bottom line.

"We take time to help customers find the best product -- only to learn they have every intention of buying the product online due to the sales tax loophole that our state has failed to fix. We need leaders in Trenton to reject this terrible deal and demand every Internet retailer play by the same rules and start collecting sales tax immediately, just like I do."