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Gov. Patrick: 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

TELL US: What do you think? Should Amazon begin collecting state sales tax? Tell us in the comments section!

Srinivasan Sankar November 25, 2012 at 03:46 PM
Amazon need to collect state taxes only if they have a retail store presence in the state. Just having a back office systems they don't need to. What makes amazon great for shoppers is their low price and no taxes. I feel state sales taxes are double dipping on top of income tax that we already pay. So NO SALES TAX will be my choice.
Bill Darcey November 25, 2012 at 10:23 PM
Level the playing field , small businesses , brick and mortar which employs our people are at a disadvantage ; if we have a sales tax it should apply to anyone selling from any platform to customers in a given jurisdiction . We have given the online retailers a jumpstart , now it's time for fairness .
Daniel F. Devine November 26, 2012 at 10:46 AM
Hope OBAMA gives PATRICK a position on his dysfunctional cabinet & Massachusetts can get rid of this tyrant.
paul November 26, 2012 at 12:35 PM
How about cut state spending? Just last week Sheila Burgess resigned as head of the state highway safety division because of a bad driving record. Why do we need a highway safety division? We all have mandatory auto insurance in Massachusetts and every ticket makes the cost go up, just another office full of people doing nothing all day and we are paying for all of them for life.
Amy November 26, 2012 at 02:21 PM
Yes the Govenor has cut so much in spending here in Taxachusetts that we must raise taxes,
Ken B. November 27, 2012 at 11:55 PM
DeVille needs the money to subsidize illegals' in-state tuition, SNAP, EBT cards, section 8, medicaid, pet care allowance, clothing allowance, etc.

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