Questions About Tax Code As Amazon Makes Massachusetts Move

Apr 23, 2012 is opening a research facility in Cambridge and is acquiring a robotics facility in North Reading, and some are now wondering if the company is subject to the Massachusetts sales tax.

A 1992 Supreme Court decision said that states cannot make out-of-state businesses collect sales tax. In other words, a retailer must have a physical presence in the state to pay sales taxes. Spokesman for the Massachusetts Department of Revenue Bob Bliss…

President of the Retailers Association of Massachusetts Jon Hurst says that the decision was designed for a retail market that has changed dramatically in the past two decades…

Hurst remarked that because is opening two new facilities in Massachusetts, they should play by the same rules as independent retailers across the state.

The Retailers Association of Massachusetts is leading a collective known as the Main Street Fairness Coalition, to close what they are calling a tax loophole. The Coalition says that tax-free online sellers are putting a disadvantage over mom and pop shops.

Amazon is not doing anything illegal. It would be up to Congress to change the law to require them to pay the sales tax. DOR spokesman Bob Bliss said that the state could not make any comment on their working relationship with clients, but Jon Hurst said that law does not need to be changed to make a deal with the company that he argues now has a presence in the Commonwealth.

Currently, the responsibility of paying sales tax on out-of-state online purchases falls on the individual consumer.

Senator Katherine Clark, who serves as Chair of the Joint Committee on Revenue, said that a billed called the Mainstreet Fairness Act that was filed in 2009 seeks to collect sales tax for all online purchases.

Senator Clark added that if Massachusetts were to adopt the legislation, it would join over 20 other states that have filed similar laws to collect on online purchases.

Governor Deval Patrick made a statement in a call-in radio show where he announced that “the state can only go hat-in-hand to Amazon officials to ask for help in collecting state sales taxes.”

The company does collect state taxes in New York, Kentucky, Kansas, Washington, and North Dakota.