NJ Lawmakers Introduce Legislation Benefiting Amazon

This week, four New Jersey state lawmakers introduced legislation that would provide online retailers with a sales tax exemption in exchange for a capital investment of at least $65 million and the creation of at least 1,500 full-time jobs in the state between January 1, 2012, and December 1, 2013. The legislation, A. 2608, was introduced following news that Amazon.com was considering opening a warehouse in the state.

The bill was sponsored by Assembly members Albert Coutinho (D-Essex), Vincent Prieto (D-Bergen/Hudson), Troy Singleton (D-Burlington), and Lou Greenwald (D-Camden).

Under the bill, a company such as Amazon.com would be granted a sales-tax exemption on New Jersey sales until September 1, 2013. The bill’s sponsors are describing it as a win for in-state retailers because it will force online retailers with warehouses — or any kind of facility that helps “facilitate the delivery of property or services” sold by a remote retailer to its New Jersey customers — to collect and remit sales tax to the state.

Responding to news of the proposed legislation, ABA CEO Oren Teicher noted that under existing sales tax law, “Amazon.com already has nexus in the state via its online affiliates and its subsidiaries. All this legislation would do is ensure that Amazon.com’s unfair sales tax exemption continues through at least one more holiday season.”

Teicher said that the narrow time frame of this legislation suggests that this bill was written specifically for Amazon.com. As such, “should this bill become law, the State of New Jersey will be subsidizing a company with a market capitalization of more than $81 billion at the direct expense of its own in-state small businesses, which currently are obeying the law and collecting sales tax. Statewide, small businesses in New Jersey are essential engines of job creation, and for the state government to be considering passing legislation that creates market inequality is astounding.”

ABA is urging bookstore members in New Jersey to call their state lawmakers and make their views clear regarding the Amazon.com sales-tax exemption. “Unfortunately, this legislation has momentum, so if legislators do not hear from New Jersey businesses, this bill will pass and be signed into law,” Teicher stressed. “Make your voice heard and urge your legislator to vote ‘no’ to A.2608.”

There are likely to be hearings in both the State Assembly and Senate on the bill in early March. Booksellers who are interested in testifying against the bill should contact ABA Senior Public Policy Analyst David Grogan at [email protected] or at (800) 637-0037, ext. 6662.