Amazon.com to Collect Sales Tax in Massachusetts Starting Fall 2013

On Tuesday, December 11, Gov. Deval Patrick announced that Amazon.com will collect and remit sales tax in Massachusetts starting next fall and that the online retailer will work with the state toward enactment of federal legislation to resolve the sales tax issue by creating an equitable and simple framework for collecting sales taxes. As part of the agreement, Amazon has said it will create hundreds of high-tech jobs in Massachusetts in the coming years. The agreement will take effect on November 1, 2013, in time for the next holiday season.

“I value the contributions large and small employers alike make to Massachusetts’ economic vitality, and this agreement captures that,” said Gov. Patrick in a statement. “We are thankful Amazon was willing to come to the table, and we will continue our conversations with them about creating jobs here. This agreement is a win for all sides, and I am pleased it promises to generate millions in long-term revenue for the Commonwealth.”

The Massachusetts Main Street Fairness Coalition [1], an organization made up of retailers, elected officials, labor unions, trade and business associations, and individuals, including the American Booksellers Association and the Retailers Association of Massachusetts (RAM), supports the agreement.

The Massachusetts Main Street Fairness Coalition has been asking Gov. Patrick to take action to force Amazon to collect sales tax for most of the year.  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 coalition will now focus its efforts on federal legislation in Congress, which would give states the authority to pass sales tax fairness laws to level the playing field between all online sellers and traditional retailers.  

“Our members are grateful and relieved to know that they will not have to face another holiday sales season with a 6.25 percent tax disparity with the world’s largest online seller,” said Jon B. Hurst, president of the Retailers Association of Massachusetts.  “Although we would have preferred a level playing field this holiday season, we are grateful to Gov. Patrick for his tireless work on this issue.  Unfair sales tax application is an antiquated policy that favors out of state businesses over local employers and it has to end.  The announcement today is an important and significant step toward realizing that ultimate goal.” 

“Today’s news from Massachusetts is further evidence of the progress being made in establishing sales tax fairness around the country. ABA members have been at the forefront of this fight for years, and we are clearly making headway,” said ABA CEO Oren Teicher. “We remain confident that additional states will begin collecting sales tax in 2013, and, at the same time, ABA and our members will continue to strongly support legislation pending in Congress to establish a national solution. We’ve always thought that was best, but the fact that additional states are doing the right thing is excellent news.”

“Today’s announcement of Amazon’s agreement to finally collect sales tax was welcome news,” said David Didriksen of Willow Books & Café [2] in Acton, Massachusetts. “We have been fighting for tax fairness in Massachusetts, and other states, for a very long time. The momentum is building. Ultimately, it will be up to Congress to provide a national solution, but we are pleased that our state, at least, has at last addressed this gaping tax loophole.”

In his statement, Gov. Patrick also reiterated his support for the federal legislation to resolve the sales tax issue and encouraged Congress to act on the measure. The governor stressed that legislation currently before Congress would create a simple and equitable framework for sales tax collection to protect states’ rights, allow states to collect all of the revenue owed, and resolve the sales tax issue for states, consumers and retailers.