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Governor: Amazon Should Start Collecting State Sales Tax

The Internet giant has been exempt from collecting sales taxes in Massachusetts, but some say that changed when it bought a North Reading company this year.

The Patrick Administration is arguing that after Amazon, the huge online retailer, bought a Massachusetts company this year it is no longer exempt from collecting the state's 6.25 percent sales tax as soon as the 2013 holiday season.

Under federal law, online retailers are not required to collect state sales taxes if they do not have a physical presence in the state, such as an office building or a store, the Boston Globe reported

But Amazon bought North Reading company Kiva Systems this year, and is recruiting engineers for a Cambridge office, according to the Globe report. This, Patrick says, means it needs to start collecting the state sales tax in Massachusetts.

Amazon has faced similar pressure from other states and collects sales taxes in eight of them, according to the report. States and local retailers have also pressed the federal government to compel Amazon to pay state sales taxes.

“This is not simply a revenue issue . . . it is a matter of fairness and equity to Main Street businesses,” state Treasurer Steve Grossman wrote in a letter to the chairman of the federal Senate Committee on Finance, urging him to change online taxation laws.

Indeed, Massachusetts retailers have been fighting this battle for years, arguing that Amazon has an unfair advantage since it doesn't have to collect the tax. The Massachusetts Main Street Fairness Coalition says the state ultimately ends up losing out, too. According to its numbers, the state government lost $387 million in 2011 from residents buying sales-tax-free items online, the Globe reported.  

SomervilleGirl November 25, 2012 at 12:24 PM
Well, you can forget about all those good deals at Amazon. When will they start going after Craigslist and Ebay? I guess we'll have to BOYCOTT all retailers.
Jason November 25, 2012 at 02:42 PM
That ain't nothing, check this out. http://channelnomics.com/2012/10/05/supreme-court-destroy-channel/ You may need to pay royalties to sell your old nano...go figure. The back story is interesting and quite savvy.
Matt C November 25, 2012 at 03:36 PM
Somerville girl, somehow I don't think it will be the case. People like amazon because of scope and price of products. It does level the playing field a bit for local shops and retailers and possibly create or at least secure some new jobs in the area... and maybe that is work 7 cents on the dollar.

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