New England Newspapers
Prompted by a push from local businesses across the state, Gov. Deval Patrick may soon require retail giant Amazon.com Inc. to start collecting sales tax on orders in Massachusetts.
For buyers here, the move would effectively raise the cost of Amazon purchases 6.25 percent, the state sales tax rate.
Area consumers have expressed mixed feelings about the prospect of paying more online, but local businesses say the change would boost the local economy by making it easier for them to compete with the online discounter.
"With a lot of our products, we are very competitive with Amazon.com, but the incentive [for consumers] to not pay sales tax on major purchases, that puts a hurting on the local businesses," said Kim Taglieri, who with her husband, Tom, owns Alliance Appliance on Fenn Street in Pittsfield. "I definitely think they should have to collect the sales tax. If we have to do it, so should they."
The debate is an old one, but talk over whether Amazon should have to collect Massachusetts taxes was resurrected earlier this month after the company bought a Cambridge technology firm and opened an office there. By law, retailers are supposed to collect taxes if they have a physical presence in the state.
In response, the Retailers Association of Massachusetts sent a letter to Patrick asking him to force Amazon to pay the taxes
"We think it’s pretty clear cut that they need to start collecting," said Bill Rennie, the vice president of the association. "We don’t think people are going to stop shopping online, but you want to remove that incentive to avoid the sales tax.
"We’re happy to compete, but we can’t when state tax policy puts us at a 6.25 percent disadvantage."
Amazon didn’t respond to a request for comment, but Rennie said the company’s attorneys are arguing that Amazon is structured in such a way that it is exempt from the requirements.
The company has agreed to start collecting taxes in states where it has distribution centers, including New Jersey, Indiana, Nevada, South Carolina, Ten nessee and Virginia.
The Boston Globe has reported that implementing the tax could raise as much as $45 million in annual revenue for the state.
Patrick’s office wouldn’t comment on the issue, citing state law that protects taxpayer confidentiality. But according to The Globe, unnamed sources within the administration said Patrick wants to begin talks with Amazon, though no time line for implementing the tax has been set.
Patrick has also sent a letter to federal lawmakers supporting pending legislation that would authorize states to collect sales tax from online retailers.