Pasadena, CA -- (SBWIRE) -- 06/27/2011 -- Amazon.com is in negotiations with the Texas government for a deal which could see the state gain 5,000 jobs and $300 million in investments in the next three years.

But in exchange, Amazon is demanding an exemption from collecting tax on its online sales to Texas residents for four and half years. The exemption is similar to what it had demanded in South Carolina where it was opposed by local retailers. After months of negotiations, votes and re-votes, Amazon finally got exemption for four-and-half years on collecting sales tax from South Carolina residents.

The deal for Amazon in Texas has been attached in Senate Bill 1. SB 1 is essential to balancing the state’s budget for 2012-13 and the attached proposal at the last minute, although does not specify Amazon by name, is being seen by traditional retailers as a Hail Mary pass to the company.

There are around 1,500 traditional brick-and-mortar retailers in Texas, which employ almost 2 million people. The proposal has drawn strong criticism from the Texas Retailers Association. Amazon is also facing opposition from the Alliance for Main Street Fairness who said the government was giving preferential treatment to an out-of-state company.

Dick Lavine from the Center of Public Policy Priorities has even questioned if the state really needs the kind of jobs that Amazon will be creating. But with unemployment in Texas running at 8 percent, most Texans may not be so reluctant about working in retail jobs. RetailCrossing, a job aggregator website focusing only on the retail industry related jobs has been able to compile over 39,000 jobs so far this week.