Internet-only retailers such as Amazon.com aren't required to collect New Jersey's 7 percent sales tax,
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The Amazon.com Inc. Kindle electronic book reader is displayed on a computer monitor in April. New Jersey would have collected $171 million more in tax revenue in 2009 if online-only retailers were subject to state sales tax, a study found.TRENTON — New Jersey would have collected $171 million more in tax revenue in 2009 if online-only retailers were subject to state sales tax, according to a study released today by Rutgers University and the New Jersey Retail Merchants Association.
Internet-only retailers such as Amazon.com aren’t required to collect New Jersey’s 7 percent sales tax, according to the study, enticing customers to purchase online at the detriment of local mom-and-pop businesses.
“It’s one of the most critical issues facing retailers today,” said John Holub, president of the the Retail Merchants Association. “Independent main street retailers are being punished for following the law.”
New Jersey’s losses are expected to increase over time, the study found. By 2015, the number is expected to reach $310 million in lost sales tax revenue.
Holub’s group is lobbying for legislation to require online-only retailers to collect sales tax. The issue — dubbed "e-fairness" — has gained national attention, and other states such as New York and California have passed legislation to address it, he said.
Harvey Finkel, a local book store owner in Clinton Township, said shoppers will browse his bookstore, then tell him they’d rather buy the book online to save money.
“We’re just looking for fariness,” Finkel said at a Statehouse press conference this morning. “It brings less people into the store. It’s just not good for our communities.”
Holub said consumers are required to report foregone out-of-state sales tax and their annual tax returns, but most people aren’t aware of the requirement.
“The burden then falls onto the consumer,” Holub said.
He said his group has started to reach out to legislators.
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