MA Treasurer Urging US Senate to Act on Online Retailer Collection of Sales Taxes

Massachusetts Treasurer Steve Grossman wants to get rid of tax free shopping on online sites like Amazon.com.  He’s urging the US Senate to take action.

Grossman is calling on US Senator Max Baucus, the chairman of the Senate Committee on Finance, to pass a bill that would allow states to force online retailers to collect sales taxes. 

Currently, online vendors like Amazon.com only have to charge sales tax if they have a physical presence in the state.

In a letter to Chairman Baucus, Grossman says local businesses shouldn’t have to compete with online sales giants that do not have to collect sales taxes.

“5000 thousand people in Massachusetts work in the retail sectors of the economy.  It’s 18%.And all those people are at a 6 and a quareter disadvantage every day they go to work to the internet companies and that’s not fair.  Let’s level the playing field and create main street fairness.”

At the same time, Massachusetts has been in separate discussions with Amazon, to require Amazon to impose the state’s 6.25% sales tax after the company bought a local technology firm and opened an office in Cambridge.  Governor Deval Patrick says there probably won’t be a compromise by the holiday season.

“The conversation with Amazon here is different than the conversation Amazon has had with other states.They have and reached agreements in states where they actually have a presence, a distribution facility.  They don’t have that here.  So it’s been a different conversation with them.”

Even if there is an eventual agreement with Amazon, Grossman says that doesn’t eliminate the need for a federal law covering all online retailers.

He says the state missed out on 387 million dollars of revenue last year from failing to collect sales taxes for online purchases.