BOSTON - Online retail warehouse Amazon.com will begin collecting state sales tax on purchases made by Massachusetts customers beginning in the fall of 2013, Gov. Deval L. Patrick’s office announced Tuesday.
The governor’s office had been pressing Amazon to collect sales tax from Massachusetts customers, according to The Boston Globe, arguing that it was no longer exempt from charging the tax under federal law.
Under federal law, online retailers do not have to collect sales taxes unless the company has a physical presence, such as an office or store, within the state.
Patrick argued that Amazon’s purchase of North Reading technology firm Kiva Systems earlier this year, in addition to its efforts to recruit engineers for a new office in Cambridge, establish the physical presence that warrants the 6.25 percent sales tax. The Globe reported that Massachusetts lost out on an estimated $387 million in 2011 from residents buying tax-free products from online retailers.
“I value the contributions large and small employers alike make to Massachusetts’ economic vitality, and this agreement captures that,” Patrick said in prepared remarks. “We are thankful Amazon was willing to come to the table and we will continue our conversations with them about creating jobs here. This agreement is a win for all sides, and I am pleased it promises to generate millions in long-term revenue for the Commonwealth.”