Christie’s Tax Deal with Amazon: The Future for Online Shopping

By Bob Holt for NewJerseyNewsroom

Due to suffering state budgets, tax-free sales on the Internet may be coming to an end.

Gov. Chris Christie recently reached an agreement with to collect sales taxes on the state’s online purchases in exchange for locating the company’s distribution facilities in New Jersey.

Christie said taxing of online sales was “an important issue to all the nation’s governors” and endorsed legislation that would give all states the same taxing authority, according to Job Mouse.

In May, Christie announced that the online giant wouldn’t charge New Jersey’s 7 percent sales tax until July 2013 because they were bringing in an estimated 1,500 full-time jobs, and thousands of seasonal, part-time and construction jobs.

Scott Mason is a vice president at Lowe’s home improvement centers, one of the companies at a disadvantage in relation to taxes. “Having one of the most recognized and widely popular Republican leaders take this position gives other politicians comfort that the online sales tax is fair and helps state budgets in crisis,” he said, according to Home Channel News.

“The handwriting is on the wall that states will collect sales taxes on online purchases,” Senator Lamar Alexander from Tennessee said, according to the Wall Street Journal. “This is going to happen—if not this year, then definitely by next year.”

According to CBS News, states will not collect $23 billion in sales tax for online purchases in 2012, and the funds will help recover state budget shortfalls. CNN reports that 42 states will be facing deficit budgets this year.

Six states currently collect sales tax from Amazon, and seven plan to follow. The 13 states include nearly half the population of the U.S. Amazon itself even supports a national regulation, as long as it applies to their online competitors.