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Amazon Brings 3,000 Jobs to Florida in Deal With State

June 14, 2013

Amazon will bring 3,000 jobs to the state in a deal that also means Floridians will have to start paying taxes on purchases from the online retailer.

Gov. Rick Scott's office announced Thursday that Florida had landed the deal
with Amazon to create 3,000 full-time jobs with benefits and more than $300
million in capital investment by the end of 2016. About 1,500 of those jobs
could come to the Interstate 4 corridor.

It is unclear when Florida residents will have to start paying taxes on Amazon
purchases, but it could be as early as next spring.

Scott was vague on most details of the deal, such as where distribution centers
or offices for the company might be built or how much tax-incentive cash would
be required to close the deal.

An Amazon spokesman would not give further details Thursday. But a source with
knowledge of the negotiations said the company plans to build two 1
million-square-foot "fulfillment centers" somewhere along the I-4 corridor
within the first year of the deal, adding at least 1,500 jobs. The company could
eventually add an additional two to four centers in other parts of the state.

"Amazon will continue to work with Enterprise Florida 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 and creates jobs in
Florida," Scott said in the news release.

It added that Amazon "will begin collecting Florida sales tax at such time as it
is required under current Florida law."

The announcement comes months after Florida broke off negotiations with the
Seattle-based retail giant over when it would have to start collecting Florida's
6 percent sales tax.

Lawmakers have considered bills to require online retailers to pay taxes in
recent legislative sessions, and so has Congress. The question may now be moot
relative to Amazon, because it is likely to begin collecting taxes by next
spring once its first warehouses open, according to sources familiar with the
negotiations who asked not to be identified.

Neither the Governor's Office nor the state's jobs agency, Enterprise Florida,
could say specifically when the warehouses would open, and that "the
availability of economic development incentives will be a material factor in any
final location decisions."

As soon as Amazon has a presence in the state, that should trigger collection of
sales tax unless the Department of Revenue has approved a delay, said John
Fleming, a spokesman for the Florida Retail Federation. The department could not
be reached for comment Thursday.

Bricks-and-mortar retailers have pushed for legislation allowing Florida to
collect sales taxes from online retailers regardless of whether they have a
physical presence here. The Florida Retail Federation estimates the state misses
out on $450 million worth of tax revenue annually by not being able to collect
those taxes.

"Our best estimate has been that Amazon accounts for about 10 percent of the
online sales market," Fleming said.

Amazon has been battling in a half-dozen states to avoid collecting and
remitting sales taxes even though it has a physical presence there. The company
has argued it didn't have a "nexus" of enough facilities and workers to be
forced under state laws to pay the taxes. Within the past year, Amazon has cut
deals with Nevada, Texas and California to begin collecting taxes on its sales.

Orlando industrial-real-estate brokers have speculated for years about Amazon
moving into Florida. Several have said the retail giant would be likely to build
new warehouse/distribution space, possibly in Polk County because locations
there are reported to be within 100 miles of 8 million people -- a near-range
reach uncommon throughout the country.

Buildings are also expected in South Florida, although Amazon could be slower to
locate there because of higher land and labor costs than in other parts of the
state. A warehouse in the Jacksonville area is also likely at some point.

The mammoth buildings are expected to be 1 million to 1.2 million square feet
with more employees stocking and pulling goods than found in more-automated
warehouses. One industrial broker said the retailer typically puts employees on
bicycles to collect goods for shipping from storage.

Amazon has expanded to about 10 states, often building two warehouses near each
other and selecting developers with whom it has experience.

Melissa Medley, chief marketing officer for Enterprise Florida, said the deal
was still in a negotiation stage as far as where and when the company would
begin establishing distribution centers or offices.

"We're not far enough down the road to determine whether incentives are being
offered or what kind," Medley said.

Enterprise Florida has some surplus tax-incentive cash -- as much as $49 million
a month ago -- that could be made available to sweeten the deal.

But lawmakers were only briefed this week on the deal and offered few details.

"More good jobs for Florida families is always good news," Senate President Don
Gaetz, R-Niceville, said in a statement. "The Senate looks forward to studying
the details of the proposed transaction, as those details become available over
the next few weeks.


Source: Copyright Orlando Sentinel 2013. Distributed by MCT Information Services

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