Amazon Should Collect State Taxes, Mayors Say in Letter to Gov. Patrick

There is a renewed push for Amazon.com to collect sales tax in Massachusetts now that the online retail giant has purchased a robotics company in North Reading and opened a research office in Cambridge.

Among those encouraging a change in the status quo – a federal loophole that allows Internet retailers to avoid collecting sales tax if they do not have a physical location in a state – is a group of mayors who sent a letter to Gov. Deval Patrick earlier this week, including Braintree's Mayor Joseph Sullivan.

"We have read the news reports that you are in contact with Amazon and have plans to discuss this matter with them," the group, Massachusetts Main Street Fairness Coalition, wrote in the letter. "We applaud you for your leadership and urge you to move aggressively this fall so that Amazon is in full compliance with Massachusetts tax laws by the time the all important Christmas shopping season begins."

The coalition was formed specifically to close the sales tax loophole, according to its website. Sullivan said he became involved because of a gut feeling of unfairness.

"I’m not looking to pick a fight here," he said. "We’re looking for fairness and balance.”

While he recognizes that the "ability to access products via the Internet is an important consumer choice," Sullivan said, "we need to think of our small businesses as well.”

A legal framework was created based on Amazon's physical presence in Massachusetts that requires the company "to register with the DOR to collect and remit the MA sales tax on purchases made by MA residents," the letter says.

According to the coalition, a letter sent on May 31 from them to the Patrick Administration, addressed to Massachusetts Department of Revenue Commissioner Amy Pitter, has yet to receive a reply.

The letter goes on to say:

"As mayors of eight Massachusetts cities and towns, we know firsthand that Main Street businesses are the lifeblood of our communities. They provide our citizens with full and part-time jobs, are the core of the local commercial tax base, and form the vibrant center of our community downtowns. They support the local little league and soccer teams, the school fundraising campaigns, the July 4th fireworks, and myriad other causes....

"Recently, Nevada and New Jersey have announced that Amazon will begin collecting state sales tax after locating operations in those states, and being pressed by governors and other state leaders. Amazon began collecting sales tax in Texas on July 1 of this year under the same premise. And just this month, Amazon began to collect state sales tax in both California and Pennsylvania as a result of similar action by leaders in those states....

"We understand that the ultimate solution to this problem rests with the federal government and we hope, in time, it acts appropriately to correct this imbalance. But Congress is not going to act unless pushed, and Massachusetts -- like we have on healthcare reform and many other issues in the past – can once again demonstrate national leadership on this vital issue."

Amazon is supporting a law before Congress that would allow states to collect sales tax from out-of-state businesses, according to a report by CNN.

"Amazon believes the sales tax issue needs to be resolved at the federal level and we're actively working with the states, retailers and Congress to get federal legislation passed," an Amazon spokesman told CNN.

Do you think Amazon should collect sales tax starting this holiday season?