Massachusetts Wants Sales Tax Dollars from Amazon
(Photo by William Christiansen on Flickr.)
I have a love-hate affair with Amazon. Their website is brilliant — I probably drop $500 a year on home goods, electronics, and gifts, which magically arrive at my doorstep in a few days. I’m also a big fan of the Kindle, which is phenomenal for reading everywhere (except for those annoying 10 minutes between take-off and landing).
But then there’s the evil side of Amazon, like when they bigfoot small publishers like Byliner (and author Buzz Bissinger) or when they throw a tantrum over collecting sales tax. (Although, to be fair, this is partly the fault of a 20-year-old Supreme Court decision and Congress’s general internet illiteracy). That, of course, infuriates brick-and-mortar retailers, which are at the business disadvantage of being required to collect sales taxes. When states have demanded tax dollars, Amazon often opts to take their ball and go home: When officials in Colorado, Connecticut, and Arkansas tried to collect sales taxes, for example, the Amazon cut off local affiliates.
Thankfully, Amazon is slowly starting to come around. Last week, they agreed to build a warehouse and start collecting taxes (though, not until next year) in New Jersey. And in April, they came to a similar compromise in Illinois and Texas — which boldly sent the retailer a bill for $269 million in back taxes — although they were pretty pouty about it:
“While we continue to believe the assessment was without merit, in April 2012, we entered into a settlement with the State of Texas that included an agreement to collect sales taxes on applicable sales transactions for our US-focused internet retailers beginning July 1, 2012, resolution of Texas sales taxes up to that date, certain commitments related to capital investment and job creation in the state, and an immaterial payment to the state.”
Emboldened by other states, the Globe reports today that Governor Patrick and Massachusetts are going to ask Amazon to start collecting taxes, which are estimated to be between $25 and $45 million for this year alone. That’s not a ton of money, but with the economy still slowly recovering, every bit helps — and it also shows that Patrick and company want to stand by businesses who employ people in this state.