fbpx

Changes in store as Amazon agrees to sales tax

Retailers have been talking our ears off for years about how they can’t fairly compete with online retailers, since companies like Amazon.com don’t charge sales tax.

Retailers have been talking our ears off for years about how they can’t fairly compete with online retailers, since companies like Amazon.com don’t charge sales tax.

Well, time for them to find something new to complain about, because starting next July, Amazon will slap the 7 percent tax on all goods sold to New Jerseyans.

For years, online companies not based in the state have gotten away with charging the sales tax, mainly because the federal government is busy addressing more practical matters, such as whether lawmakers are allowed only to track every website you’ve ever been to, or whether they can just go ahead and install a webcam in your shower.

In theory, the online shopper is supposed to remit the sales tax directly to the state if it’s not collected by the retailer. Of course, in theory, the concept of intelligent design makes sense to people. Here in the real world, shoppers could in some cases pay heavy shipping costs and still get a better deal with the sales tax negated — and of course, it left the state coffers a bleeding mess. The Chris Christie team expects at least another $30 million a year in revenue from sales taxes through Amazon, though to be fair, it also expects a wild jobs and employment recovery for fiscal 2013, despite all evidence to the contrary (yes, those are all separate links). But hey, at least this is real revenue, as opposed to quasi-legal diversion of transportation dollars to the general budget.

Now, don’t be silly — Amazon isn’t doing this out of the kindness of its heart. In exchange for agreeing to collect the tax, expect it to get some mighty generous incentives as it looks to build a couple of warehouses here.

In a sense, I’m kind of sorry to see steps like this, because some brick and mortars were doing a very creative job of competing to keep their doors open; here’s just one example. But it’s completely unfair to have two sets of rules, so I’m happy to see the mom and pops get their shot.

I’m even more irreverent on Twitter @joe_arney.

NJBIZ Business Events

CFO of the Year Awards

Tuesday, October 22, 2019
CFO of the Year Awards

NJBIZ Food Day 2019

Monday, November 04, 2019
NJBIZ Food Day 2019