Amazon To Begin Collecting Mass. Sales Tax In 2013

BOSTON — Online retail giant Amazon will begin collecting sales tax on purchases made by Massachusetts customers next fall, the Patrick administration announced Tuesday.

In the announcement, Amazon also said it plans to create hundreds of high-tech jobs in Massachusetts over the coming years.

“I value the contributions large and small employers alike make to Massachusetts’ economic vitality, and this agreement captures that,” Gov. Deval Patrick said in a statement. “This agreement is a win for all sides, and I am pleased it promises to generate millions in long-term revenue for the Commonwealth.”

A UPS driver delivers packages from Amazon.com in Palo Alto, Calif., in this June 30, 2011, file photo. (Paul Sakuma/AP)

A UPS driver delivers packages from Amazon.com in Palo Alto, Calif., in this June 30, 2011, file photo. (Paul Sakuma/AP)

The administration had for months been negotiating with Amazon about collecting and remitting the state’s 6.25 percent sales tax. As The Associated Press reported last month:

Under current rules, an online retailer is only required to charge a sales tax if it has a physical presence — such as a store or warehouse — in the consumer’s state.

Amazon has opened an office in Cambridge and, earlier this year, purchased the North Reading robotics firm Kiva Systems.

A study by the Massachusetts Main Street Fairness Coalition, cited in the past by Patrick administration officials, found that with a uniform online sales tax, Massachusetts could have collected $387 million in additional revenue last year.

Following Tuesday’s announcement, Secretary of Administration and Finance Jay Gonzalez said he expects the deal will increase state revenue in the low tens of millions in fiscal 2014.

The Massachusetts agreement will go into effect Nov. 1, 2013 — “in time for the next holiday season,” as the administration’s announcement notes.

“Our businesses 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,” Jon Hurst, president of the Retailers Association of Massachusetts, said in a statement. “Although we would have preferred a level playing field this holiday season, we are grateful to Governor Patrick for his tireless work on this issue.”

On Tuesday, both the governor and Amazon also said “they will work together toward enactment of federal legislation to resolve the sales tax issue by creating an equitable and simple framework for collecting sales taxes,” according to their announcement. The legislation would require remote online retailers to collect and remit state sales taxes.

As State House News Service reports, a number of states, including New Jersey, have reached similar agreements with Amazon.

Earlier Coverage:

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  • Ana_900

    What? Why?

    • Mark

      Here in Massachusetts, we have voluntary sales tax collection on our income taxes. Anything we purchase out of state and use in Massachusetts is supposed to be claimed on our taxes, and the tax is supposed to be paid. Guess how well that is going . . .

  • Sean Murphy

    Business oportunity for all NH based private mailbox operators.

  • Dianne

    This stinks! As soon as my kids are grown, I am moving the hell out of this state.

    • Paul

      Statements like that prove your ignorance. All states have that same law.

      • Cathy

        Not all states. There are a few that do not like NH.

        • dust truck

          oh really? NH has no taxes? Here’s a hint: they do. just because they don’t have an income tax doesn’t mean they won’t take it out of you and don’t forget they recently elected a landslide of democrats. Perhaps Michi-sippi is more to your liking?

      • http://www.facebook.com/profile.php?id=709354427 Kim Chambers Bagley

        Amazon collects from only 9 states

    • dust truck

      Don’t worry; you won’t be missed.

  • stumpy23

    Wow – way to bow to local brick and mortar store pressure.
    Here’s a deal – collect the tax, then tell me how you will balance our budget, Governor Patrick.
    Maybe we should spend $800million fixing the signaling on the green line?

    • DeathsHead Knight

      LMAO the green line… Now there’s a punchline that could be used for ANY joke.

  • Kevin

    Bye bye Amazon prime membership.

  • RD

    The Amazon retailer has no presence in Massachusetts and intentions announced by a politician don’t cut it —- They shouldn’t put a cart before the horse— there should be no tax until an actual legitimate out;let in Massachusetts exists , and that is not going to be the case, the Govenor wants money and thats all he is after.

    The only time a state tax should be charged on a transaction is when the state does something for the entities involved, which is not the case in Massachusetts at this time frame.

    If all online retailers charged a tax and rsidents simply paid it no questions asked, then they would be victims of fraud.

    Someone in a distant land charges you tax , never forwards it to state, state can’t collect it, no attachable assets exist. — therefore you paid more and got nothing and thats all that became of it.

    State helps local retailers thus it has ability to tax local sales—- roads, police,fire,
    rebuild after storm , etc……

    whereas state does nothing for distant online retailer or even you

    if you are victim of fraud or theft you have no state agency to assist you in recourse for product from online distant retailer.

    If an enforcement arm is begun later in time nationally or etc,….

    all would feel they got something and a tax on sales should route to them, that is not the case nor will it be, you pay you get nothing but inflated costs that you would not get had online tax not existed.

    state should abolish its sales tax to stimulate job growth —- this is a a disaster in that
    it will only serve to cement the thing in , wheras a no tax on online agent was the pry bar to tossing out the sales tax and helping all residents of Massachusetts by cutting costs and stimulating growth of jobs etc,…… by dumping entire sales tax law as a whole as should be done.

    • http://www.facebook.com/profile.php?id=709354427 Kim Chambers Bagley

      Amazon this year bought a robotics company in North Reading and opened a
      research office in Cambridge. Hurst said that should allow the state to
      require Amazon to collect the sales tax from Massachusetts customers. Mass is also the 9th State that Amazon collects from.

  • http://www.facebook.com/JasonDMorse Jason Morse

    This would be fine if it were across the board. But this will be terrible for me. I do most of my online shopping with Amazon. When I do my MA taxes, I always check the box saying I made online purchases so I pay the tax based on my income. Now I’ll be taxed on all my Amazon purchases, but I’ll still have to check the box. So unless I itemize all the non-Amazon, non-taxed online purchases I make, I’ll probably be paying way too much. Unless they change that part of the MA state taxes, this will be way more work for me and a lot of other people.

  • wareinparis

    No one wants to pay taxes, myself included. We all want and need the services of our government. These services cost money.
    Yup, I have shopped with Amazon for years, and not paid sales tax. That does not make it right. Just as the time is at hand for the wealthy to pay more taxes, the time is now for all of us with internet access to pay our fair share of Massachusetts sales tax.

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