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From staff and wire reports
RICHMOND
Internet retail giant Amazon.com Inc. plans to spend $135 million to build two distribution centers just west of Petersburg and create more than 1,350 jobs, Gov. Bob McDonnell announced Thursday. It's the largest jobs-creating deal in the state since 2004, according to the governor's office.
Amazon will build a 1-million-square-foot warehouse in Chesterfield County at a cost of $85 million and hire more than 1,000 people to work there. A $50 million fulfillment center in Dinwiddie County will employ 350. The company, based in Seattle, has an existing distribution center in Sterling.
Amazon also announced Thursday that it would open two new distribution centers in Tennessee, where it now has two facilities. In that state, the company plans to spend $135 million and add more than 1,300 jobs.
The new warehouses, expected to open next fall, are part of the online retailer's plan to support growth and keep up with increasing sales of everything from electronics to shoes. In October, Amazon said it would build 17 new fulfillment centers, adding to the 52 it had at the end of last year.
Thursday's announcements follow an agreement between Amazon and Tennessee over the collection of sales taxes. The retailer would start collecting Tennessee sales taxes in 2014.
Amazon has been at odds with several states over Internet sales tax collection as cash-strapped state governments grapple with how to capture the sales tax revenues that go uncollected from online purchases. In some cases, the online retailer severed ties with affiliates in states that passed laws in an attempt to collect sales tax.
In 2010, retail groups in Virginia pushed for such a law, which would require Amazon to collect sales taxes on purchases it processed for affiliates in the state. The proposal passed the Senate but failed to make it out of a House subcommittee, said Margaret Ballard, vice president of advocacy for the Virginia Retail Federation, the lobbying arm for the state's merchants.
Virginia law requires a retailer to collect and remit the state's 5 percent sales taxes if it "maintains or has within this commonwealth, directly or through an agent or subsidiary, an office, warehouse, or place of business of any nature." Despite the distribution center it already has in the state, however, Amazon has operated under an exemption to that law and does not include sales tax on purchases made in Virginia.
In response to the Amazon project announced Thursday, the federation released a statement calling for Virginia leaders to level the playing field between Amazon and brick-and-mortar merchants.
"The Virginia Retail Federation assumes that Amazon has agreed to collect state sales tax in Virginia now that they will unquestionably have a physical presence in the state," said Ray Mattes, president and CEO of Retail Alliance, in the federation's statement. The alliance represents Hampton Roads retailers and is part of the federation.
But state officials said Thursday that Amazon won't have to pay sales taxes after it builds the new warehouses, either, because the facilities are being built and operated by a separate distribution company, not the actual retail business.
"This was solely about jobs and economic development here," said McDonnell, calling the sales tax issue a discussion for "another time."
Congress might ultimately settle the matter. Pending federal legislation would require large online retailers to collect taxes on purchases regardless of where those retailers are based or where they have a physical presence.
McDonnell, who approved $3.5 million in grants from the Governor's Opportunity Fund for the Virginia facilities, touted the additional jobs in the state, where the seasonally adjusted unemployment rate fell to 6.2 percent in November.
In addition to McDonnell's grants, $850,000 is being provided by the Virginia Tobacco Indemnification and Community Revitalization Commission.
The company also is eligible to receive benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development. The Virginia Department of Business Assistance also will provide funding and services to support the company's recruitment and training activities.
Pilot writer Carolyn Shapiro and The Associated Press contributed to this report.
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Amazon the Tax Dodger
Amazon does something that virtually no other online retailers do - they make the CUSTOMER remit the Virginia sales tax rather than collecting and remitting it themselves. This gives Amazon a huge advantage - the perception of a 5% cheaper product, even though the customer is supposed to pay the tax on their income taxes at the end of the year, which is rarely done. What's truly remarkable is that even in states that Amazon has a physical presence - they still try to avoid collecting the taxes. They do this by creating affiliated companies named things like Amazon.com.vadst and then claim it's not "Amazon." That defies common sense and logic. We need to create a level playing field in Virginia for all sellers, online and in person stores.
Only Amazon?
"Amazon does something that virtually no other online retailers do - they make the CUSTOMER remit the Virginia sales tax rather than collecting and remitting it themselves."
Not sure where you order on-line, but I've rarely found an on-line merchant that charges state sales taxes. Amazon is far from the only one who does this.
No sales taxes ...
that's good! Our leaders shouldh've started slashing that tax anyway. Cutting the sales tax, at least on food, is THE best and most equitable way to give everybody a tax break. Imagine how much money that would save EVERYBODY which would hopefully would go to the "savings" and "investment" factors of the GDP or, at worst, be recycled in consumption. More money for households, more income for business, more income for banks and brokerages to re-invest in business.
Yeah, you might remember what happened to the last round
...which Wall Street spent on creating a bubbles which cost everyone. They, however, escaped with their six and seven digit bonuses which they invested in moving our manufacturing equipment to China. And more bonuses for all (in the Executive suite anyway).
And just how many Virginians will get those great minimum wage
jobs? It might be fewer than you think: http://finance.yahoo.com/news/welcome-to-amazon-town.html . "...Many of these employees belong to the community of "workampers," a sort of modern-day migrant worker. Many of them are retirees who spend all or part of the year living in RVs and taking odd seasonal jobs around the country. While some workers really need the money, others said they take the gigs to help fund their adventures or just for fun..."
But that's OK. Virginians
But that's OK. Virginians WILL pay the taxes which support the grants and subsidies.
Go BoB! Republicans BUILD
Go BoB!
Republicans BUILD jobs!!!!
Passed over again
Well, I guess Hampton Roads got screwed again. I guess none of the leaders from our disjointed, dysfunctional area approached Amazon about locating here. Good ports, good rail service, decent (but not the best) access to the highway system....I would have tried to sell them. Maybe the impending tolls scared them away.
Hampton Roads?
Be honest, Hampton Roads is too congested. Look at how far the area is behind as far as accomodating the traffic that is there now. It's not called being screwed, it's called PROGRESS!
Waaaaaa........ Can't you be
Waaaaaa........
Can't you be HAPPY for "Virginia" that this will help our Unemployment?