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Governor: Amazon Should Collect 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 said, means the company 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

TheMaskedTruthsayer November 21, 2012 at 05:36 PM
Brilliant plan to hamstring 2 new business ventures, along with the jobs they will create. Income stream from tax free sales vs. costs of operatimng/maintaining 2 seperate business enterprises in MA...hmmmm, wonder what Amazon will do?
jen lavry November 22, 2012 at 04:50 PM
I like Gov Patrick but he needs to stop thinking up ways to hurt the economy by taxing us to death. The Commonwealth has enough revenue and should learn to handle it efficiently before it asks for more.
Just a person! November 23, 2012 at 01:21 PM
He needs someway to fund his idiotic idea to give away in state tuitions to "illegal's" (and my emphasis is on ILLEGALS) One way is increase all taxes, in other words the middle class pays again!
j November 23, 2012 at 02:55 PM
Because rich people don't shop online as well?
Owen November 25, 2012 at 12:47 AM
Throughout the history of the United States, immediately scapegoating immigrants (illegal or otherwise) has been the go to argument. Just wanted to point that out. I"m fine with Amazon collecting sales tax. You'd pay tax on items who purchase in a "walk in " store. Why not online?

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