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Shopping Center Industry Applauds Efforts to Bring Sales Tax Fairness to New Jersey Brick-and-Mortar Retailers

May 31, 2012

Shopping Center Industry Applauds Efforts to Bring Sales Tax Fairness to New Jersey Brick-and-Mortar Retailers

State pushes Amazon to begin collecting sales tax in 2013

WASHINGTON, May 31, 2012 – New Jersey Governor Chris Christie announced yesterday that Amazon will begin collecting sales tax on purchases made by New Jersey residents starting in July 2013.  Currently, Internet retailers like Amazon are required to collect sales taxes only in states where they have a physical nexus (store, office, warehouse, or distribution center), putting brick-and-mortar retailers that must collect the tax at a competitive price disadvantage.

“We appreciate the hard work of the State Legislature and Governor Christie to ensure that Amazon collects sales taxes in New Jersey, just like their local retail counterparts in the state are required to do,” said Michael P. Kercheval, president and CEO of the International Council of Shopping Centers (ICSC).  “This tax loophole currently enjoyed by online sellers has jeopardized local businesses and the jobs they provide.  Any effort to level the playing field for New Jersey retailers is significant in maintaining the economic health of communities throughout the state.”

ICSC and its members in the Garden State worked closely with the New Jersey Retail Merchants Association to educate state officials on the role of community-based retailers in local economies and the importance of sales tax fairness to those businesses.  According to a 2011 study from the University of Tennessee, each $1 million of new retail sales in traditional brick-and-mortar establishments adds 3.61 jobs. The same $1 million in new sales at Amazon is estimated to create just 0.88 jobs.  According to ICSC data, one of out every 11 U.S. jobs is shopping center-related, and for every 100 individuals directly employed at regional shopping centers, an additional 20-30 jobs are supported in the community due to multiplier effects.

The deal in New Jersey highlights the challenges that states face with requiring that online retailers collect sales taxes like their brick-and-mortar counterpoints.  Currently, federal legislation is necessary to close the online sales tax loophole and allow states to apply the same sales tax collection standards across all retailers. ICSC appreciates Governor Christie’s endorsement of a federal solution and his urging Congress to get behind “…legislation to allow states to be able to make these choices for themselves.”

ICSC has promoted sales tax fairness for more than a decade, advocating that a “sale is a sale” regardless of whether the purchase takes place on Main Street, at a shopping center, via mail-order or over the Internet.

Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 55,000 members in over 90 countries include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials. As the global industry trade association, ICSC links with more than 25 national and regional shopping center councils throughout the world. For more information, visit