Amazon Overpays Taxes to Hazleton, Seeks Refund After Three Years

The Amazon Fulfillment Center in Hazle Township has inadvertently overpaid local taxes to the City of Hazleton for the past three years. According to the 2026 Hazleton budget proposal, the facility has mistakenly remitted approximately $300,000 annually in Payroll Prep Tax (PPT), a tax levied on employers based on total payroll for businesses within a municipality. This tax replaced the Mercantile Tax a few years ago.

The fulfillment center is situated at 550 Oak Ridge Rd. in Hazle Township, not within the city limits of Hazleton. City Solicitor Sean Logsdon stated that the city promptly notified Amazon of the error, clarifying that the distribution center was located in Hazle Township. Despite this notification, Amazon continued to make payments to Hazleton.

“The city assumed they were paying based off of other Amazon businesses or related businesses operating in the city,” Logsdon explained. “We also had our tax collection agent inform Amazon that the distribution center was in Hazle Township.”

After three years of consistent quarterly payments, Amazon alerted the tax collection agent that it would be filing an amended return for the incorrect payments and seeking a refund. Currently, discussions are ongoing between the city and Amazon regarding how to address this issue.

Impact on City Budget and Taxpayers

This unexpected overpayment is anticipated to lead to a significant drop in tax revenue for the city. The potential loss has already been factored into the city’s 2026 budget, which was approved on December 16, 2026, featuring a 22% tax increase. As a result, the municipal millage rate will rise from 9.13 to 11.14. Homeowners with properties assessed at $100,000 can expect an annual increase of approximately $201 in their taxes.

“Legally, they are entitled to have this funding returned to them,” stated City Administrator Daniel Lynch during the Hazleton City Council meeting on November 13. “Currently, the mayor is in negotiations and looking to see if we can structure a repayment. I think at a minimum we’re hopeful that we will be able to repay at the same rate they paid.”

The Hazle Township supervisors have not provided any comments regarding the situation at this time. As negotiations continue, the resolution of this tax issue could have lasting implications for both the city and Amazon, as well as for taxpayers in the region.