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Amazon deal could bring 1,000 jobs to Hillsborough, but more taxes for online shoppers

If Amazon does build physical locations in Florida, it means Floridians ordering from the retailer’s website would be required to pay a 6 percent sales tax.
Published Jun. 14, 2013

TALLAHASSEE — Gov. Rick Scott and Amazon announced a deal Thursday in which the Internet retail giant would create 3,000 new jobs in Florida by 2016 — with about a third of those likely headed for a 1-million-square-foot warehouse in Ruskin, a part of Hillsborough County desperately needing an economic jolt.

But the good news comes with a catch: The new jobs in the state also mean consumers will be required to pay a 6 percent state sales tax on all the books, DVDs, CDs and other products they buy through Amazon.com.

The tax will kick in once the company opens its Florida operations centers, possibly next year.

"Amazon's commitment to create more than 3,000 new jobs in Florida is further proof that we've turned our economy around," Scott said in a statement. "Amazon will continue to work with (state officials) on its ongoing projects which will include a return on any taxpayer investment, and we look forward to the company's announcements as it chooses locations."

Amazon officials couldn't be reached Thursday, but details of the proposal were included in a packet of information provided to Hillsborough County commissioners.

As part of the agreement, Hills­borough officials will be asked next week to approve nearly $6.6 million in financial incentives for Amazon.

In exchange, Amazon would create 1,000 jobs in the South Shore area of Ruskin near State Road 674 and Interstate 75, and invest up to $200 million in a massive "state of the art facility."

Of the 1,000 jobs, 375 would be "higher-wage quality jobs," according to the county, with average annual pay of $47,581.

Commissioners reached late Thursday were practically giddy at the prospect.

"This is a grand slam for South Shore," said commission Chairman Ken Hagan. "It's an extraordinary opportunity for Hillsborough County."

Commissioner Sandra Murman, who represents the area where the distribution center is being considered, said she's "ecstatic."

"This is the big silver bullet we've needed to kick off our economic development efforts," Murman said.

The cost to the county would be spread out over seven years starting in 2016. Officials say it would be awarded to the company only if it builds the complex and creates jobs.

"From that point of view, it's a really good value," said county Administrator Mike Merrill. "And South County definitely needs jobs."

Negotiations between Amazon and the state seemed dead last month after Scott signaled that he would not support a proposal that would include — essentially — a tax increase for many Floridians. But Scott spokeswoman Melissa Sellers said the deal announced Thursday was not a reversal of his earlier stance but a "culmination of ongoing discussions."

When the facilities are operational, Amazon will begin collecting the 6 percent state sales tax as required under Florida law. A 1992 U.S. Supreme Court decision ruled that an Internet company collects sales taxes only in states where they are physically located, which would eventually include Florida.

"We haven't had a chance to review the proposal," said John Fleming, spokesman for the Florida Retail Federation, an association of 6,000 small and large retailers who are physically located in the state and must levy sales taxes on their transactions. "We'd like to have more details on the time line. There are a lot of questions about location and what type of facilities we're talking about."

The federation has long complained of the unfair advantages online companies like Amazon have. The Florida Retail Federation estimates that the state loses $450 million a year in online sales taxes, with Amazon accounting for about 10 percent to 20 percent of that total.

State officials said they could not provide any more specifics because negotiations were ongoing and confidential under Florida law.

"We are truly in the process of negotiations where it's confidential," said Melissa Medley, chief marketing officer with Enterprise Florida, the public-private economic partnership overseeing the discussions, which could include additional warehouses in other parts of the state.

Overall, the state says Amazon would invest $300 million in Florida.

"The company is very forthcoming in saying that they are making a commitment, but we haven't progressed that far into the project to give any details," Medley said.

Times/Herald staff writer Steve Bousquet contributed to this report. Michael Van Sickler can be reached at mvansickler@tampabay.com or (850) 224-7263.

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