Online retailer Amazon to make investment in NC

dbracken@newsobserver.comJanuary 23, 2014, which will collect sales tax in North Carolina beginning Feb. 1, has confirmed that it plans to make an investment in the state.

The Seattle-based company declined to disclose details of the project other than to say it is “considering various opportunities and plans to invest in North Carolina.” Amazon’s investment explains the timing of the company’s decision to begin collecting sales tax here.

Federal law does not require online retailers to charge sales tax in states where they don’t have a store or some other physical operations. Amazon now collects sales tax in 19 states, including Virginia and Georgia in the Southeast.

Amazon has been investing billions of dollars building warehouses and fulfillment centers around the country that enable it to deliver products more quickly to customers. The company has also been investing heavily to build data centers around the globe that run its Amazon Web Services business.

It’s unclear whether the company is seeking incentives from the state for any investment it might make. A state Commerce Department representative did not respond to a request late Thursday about whether state officials have had discussions with Amazon. The department typically doesn’t comment on such negotiations.

Amazon’s move to begin collecting sales tax is welcome news for both brick-and-mortar retailers and North Carolina officials who have long complained that not paying the tax gave the online retailer an unfair advantage.

The state’s sales tax is 4.75 percent, but local taxes increase the rate ranging from 6.75 percent to 7.5 percent, depending on the county.

The N.C. Department of Revenue in 2010 tried to get Amazon to turn over customer names so that the state could charge those customers sales tax for their online purchases. But the ACLU, a nonprofit civil rights advocacy group, sued over privacy concerns. The case was settled in 2011.

The Department of Revenue issued a statement this week saying it welcomed Amazon’s decision.

“The Department is pleased with this outcome and believes it is an important step in the effort to ensure all North Carolina taxpayers are treated equally,” the statement said.

A department spokesman said the department didn’t have an updated figure on how much revenue would be generated from Amazon’s decision. One 2010 estimate said failure to pay the taxes costs the state, its cities and counties $190 million a year in lost revenue.

Bracken: 919-829-4548; Twitter: @brackendavid

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