Cry Me a River: Soon, shopping at Amazon will no longer be tax-free in Massachusetts



Last modified: Tuesday, December 31, 2013



For someone who doesn't like to venture out to malls - that would be me - shopping at Amazon.com is a wonderful thing. Good prices, amazing selection - and no sales tax.But that last benefit disappears at the end of this month. Starting Nov. 1, the state's 6.25 percent sales tax will be tacked onto items bought on Amazon.com and shipped to Massachusetts addresses. (The usual rules apply about taxable items; that is, if you buy clothing or food, it still won't be taxed.) Gov. Deval Patrick announced the new arrangement with Amazon last December. So, if you typically do a chunk of your holiday shopping at Amazon, start making your list asap. You've only got two weeks to place tax-free orders.The loss of tax revenue from online sales has been a sore spot for state governments for years now. In general, online orders are subject to sales tax only if the retailer has a facility "on the ground" in the state. Brick and mortar stores say that puts them at a price disadvantage, and there's a growing national movement to put an end to that loophole. But given the varying tax laws in the 50 states, creating a workable system is a challenge. (You can read more at www.marketplacefairness.org.)Massachusetts reached its sales tax agreement with Amazon because the retailer is "establishing presence in the state," a spokesperson for the state Department of Revenue told me this week, describing that presence as businesses and property purchased by Amazon. The company has been busy of late establishing distribution centers around the country.Sales tax on Amazon purchases in Massachusetts, by the way, will mean big money in the state's coffers. The DOR estimates that in fiscal year 2014, Amazon merchandise shipped to Massachusetts addresses will generate $36.7 million in revenue.


 


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