Massachusetts Governor Urges Amazon to Collect Sales Tax

Massachusetts Gov. Deval Patrick has joined the chorus of retailers and others that believe Amazon.com should be required to collect and remit sales tax for purchases made by residents of the state, according to a November 21 report in the Boston Globe [1]. Amazon recently purchased a robotics company based in North Reading, and, in late spring of 2012, the company opened a research office in Cambridge.

The Massachusetts Main Street Fairness Coalition (MMSFC), an organization made up of retailers, elected officials, labor unions, trade and business associations — including the American Booksellers Association, the New England Independent Booksellers Association, the Retail Industry Leaders Association, and the Retailers Association of Massachusetts — has been asking the Governor to level the playing field for Main Street retailers since the group’s formation in April 2012.

In early April, ABA CEO Oren Teicher wrote to the state’s Department of Revenue [2]urging it to require Amazon.com to follow existing state sales tax laws, just as ABA members do: “The 1992 North Dakota v. Quill Supreme Court decision as to what constitutes a physical presence in a state is clear: a remote retailer that has a store, warehouse, sales agent, or office in the state is considered to have a physical presence in the state, and, as such, is bound to follow the state’s sales tax laws. Once its office is open, Amazon.com should be required to collect and remit sales tax in the state. Our member bookstores follow the sales tax law; we believe Amazon.com should do so as well.”

In September, a coalition of the state’s mayors wrote to the governor [3] urging him to require the online retailer to collect sales tax.

An economic study released in mid-November by MMSFC showed that sales tax inequity has cost Massachusetts 1,970 new jobs, $279 million in sales to local businesses, and $387 million in state tax revenue.

Gov. Deval told the Globe that, while his office has met with Amazon.com executives at least six times over the past six months to “discuss how the retailer would undertake the complex process of programming its system to charge the Massachusetts tax on qualified purchases,” the governor is “just not sure that we’re going to have an agreement in place in time for the holidays.”

Officials in the governor’s office also noted that they would like Amazon.com to add a distribution center in the state.

In related news, Massachusetts State Treasurer Steven Grossman wrote to Sen. Max Baucus, chair of the U.S. Senate Finance Committee, and declared that the time had come for Congress to pass federal legislation to “level the playing field” for Main Street retailers, as reported by the Associated Press [4].