Amazon.com will begin collecting online sales tax from Massachusetts residents next year.
Officials made the announcement today, noting that the retail giant will start collecting Massachusetts’ 6.25-percent sales tax from residents on Nov.1. The deal is expected to bring in revenue “in the lower tens of millions of dollars,” according to The Associated Press.
It will also create “hundreds of tech jobs” in the coming years, according to Gov. Deval Patrick’s office. However, officials did not specify how many jobs the deal will create or if fulfillment centers, which Amazon has built in other states with which it has reached similar agreements, are in Massachusetts’ future.
Several states have begun requiring Amazon to collect online sales tax for purchases, saying not collecting sales taxes gives the retailer and other online merchants an unfair advantage over brick-and-mortar shops, which are required to collect sales tax. This oftentimes makes brick-and-mortar prices higher than those of online shops, which sways shoppers to buy online.
Massachusetts Main Street Fairness Coalition was happy about Patrick’s deal with Amazon. Members had been asking the governor for this deal for most of 2012.
“Once again, Massachusetts is taking action on an important issue ahead of our leaders in Washington,” says Salem Mayor Kimberley Driscoll, co-chair of the organization.
She says all purchases should charge a sales tax. “We are grateful to Governor Patrick for his leadership in leveling the playing field between our main street businesses and Amazon,” she reports.
“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,” adds Jon B. Hurst, president of the Retailers Association of Massachusetts. “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.”
Amazon already collects online sales tax in several states including, Kansas, Kentucky, North Dakota and Washington.