BOSTON (CBS) – Online retailer Amazon.com has agreed to begin collecting sales tax in Massachusetts starting next fall, Governor Patrick’s office announced on Tuesday.
The agreement will take effect on November 1, 2013, in time for the next holiday season.
The governor’s office announced the deal, while noting that Amazon plans to create hundreds of high tech jobs in the state in coming years.
In addition to the agreement, both Amazon and Governor Patrick reiterated their support for a proposed federal bill that would allow states to collect sales tax from online retailers, even if they do not have a physical presence in the state.
It is the news that Dana Brigham has been waiting years to hear.
“For every brick and mortar retailer, this is a huge victory,” Brigham said. “It is beyond about time and I wish it was yesterday instead of fall of 2013 when it would take effect,” said Brigham.
She is manager and co-owner at Brookline Booksmith on Harvard Avenue in Coolidge Corner. The store has been open 51 years and currently employs 35 people.
“We’ve changed dramatically over the years,” she said.
The store has added more gifts and has an increased online presence. But unlike Amazon.com, when her customers log on to buy, they pay state sales tax as well.
“We have to charge tax on everything we sell. And they so far charge tax on nothing they sell and that is just a huge discrepancy,” she said.
To her it is about leveling the playing field and collecting a tax that can help local communities.
“In Massachusetts, I believe there were six billion dollars in sales in 2011 on the internet and none of that taxed,” Brigham added.
Jon Hurst, President of the Retailers Association of Massachusetts, says this is not about sticking it to customers. This is a tax that should’ve been charged all along.
“This is a long time coming. This is an antiquated tax policy that did not take into account the way people shop today and where they shop,” he explained.
The argument is that Amazon now has a physical presence in Massachusetts. Its latest location is an office in Kendall Square in Cambridge.
“The government shouldn’t be picking winners and losers in the marketplace through tax policies and the reality was Amazon and other internet sellers like them have been able to get a 6 ¼% head start over our actual own employers,” Hurst said.
In a press release, Governor Patrick reiterated his support for federal legislation on the sales tax issue.
Amazon’s Vice President of Global Policy also responded with a statement.
“We appreciate Governor Patrick’s commitment to Massachusetts jobs and investment and his support for legislation now before Congress that would provide a final resolution to the sales tax issue,” Paul Misiner said. “We look forward to creating hundreds of high-tech jobs in Massachusetts and continuing to work with Governor Patrick, state leaders, retailers and congress to pass federal legislation permitting interstate sales tax collection.”
While the national discussion continues, back in Brookline Dana Brigham will gladly take this local victory.
“It’s too long in coming. But people have worked so hard on it and it is just great to see it come to fruition,” she said.
The change goes into effect November 1, 2013.
Hurst and the Retailers Association of Massachusetts are praising the Governor for pressing the issue.
“The bottom line he was able to deliver the two most important months of next year, November and December of next year. That is the holiday season and that is a huge relief to Massachusetts employers,” Hurst said.
Amazon has said in the past that it supports a national approach to the sales tax, and not state by state solutions. Amazon says federal legislation is needed to permit interstate sales tax collection to level the playing field.