Amazon to build 2 warehouses in New Jersey

Amazon plans to build two large distribution centers in New Jersey and will start collecting state sales tax next summer from its customers in the state, Gov. Chris Christie announced Wednesday.

The building of the warehouses, each projected to comprise about 1 million square feet, is scheduled to begin next year and result in 1,500 full- time jobs and thousands of part-time and seasonal jobs.

Under the arrangement, Amazon, which is based in Seattle, will start collecting and remitting the state’s sales tax of 7 percent by July 1, 2013 — unless federal legislation were to mandate an earlier date — resolving a prickly issue with merchants based in New Jersey.

Out-of-state online retailers like Amazon do not presently have to charge New Jersey residents sales tax, while in-state merchants must, leaving those with physical stores at what they feel is a competitive disadvantage. Amazon customers are supposed to keep track of what tax they owe on online purchases and then pay the amount when they file their income taxes. That rarely happens, depriving the state of revenue.

Amazon has agreed to build warehouses in a number of other states in return for extending sales tax exemptions for a certain period of time. In discussions with New Jersey officials, Amazon had sought a 22-month reprieve before it would need to begin to collect tax.

Christie estimated that the new agreement, which followed months of negotiations and hinged in large part on the timing of sales tax collections, would result in $30 million to $40 million a year in additional tax revenue for the state.