Salem mayor advocates for online sales taxes

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April 9, 2012

Salem mayor advocates for online sales taxes

By Bethany Bray Staff Writer The Gloucester Daily Times Mon Apr 09, 2012, 12:17 AM EDT

SALEM — Mayor Kim Driscoll is at the head of a movement to require online retailers to collect Massachusetts sales taxes from local customers.

Driscoll is co-chairwoman of the newly formed Massachusetts Main Streets Fairness Coalition, a group of business owners and community leaders that launches today. The coalition's first target is the online giant Amazon.com.

Having online retailers charge sales tax to Massachusetts customers would lessen the disparity between online companies and the small, independent businesses that contribute to a community, Driscoll said.

"This is not anti-Internet; it's about having one level playing field," Driscoll said. "We've certainly seen some of the positive impacts of having a thriving Main Street (in Salem), and we want to do all we can to support them. ... It's something I think is important."

The coalition will push Congress to mandate online sales tax collections across the country, said Jon Hurst, president of the Massachusetts Retailers Association.

In the meantime, they aim to have Amazon.com begin collecting sales tax from Massachusetts customers because the Seattle-based company has a presence in the Bay State.

This month, Amazon.com bought Kiva Systems, a North Reading company that produces robotic systems used to fill sales orders. Over the winter, Amazon was reported as shopping for office space in Cambridge, as well, Hurst said.

Because Amazon has a physical presence here, the company should collect Massachusetts sales tax, Hurst said.

"We argue that those two facilities create a tax nexus," said Hurst, who lives in Beverly. "(Amazon.com) is not alone, but they are certainly the 800-pound gorilla in the room. ... They should be operating by the same rules as real, local employers are doing."

According to the Massachusetts Main Streets Fairness Coalition, Amazon.com collects sales taxes from customers in five states — Kansas, Kentucky, New York, North Dakota and Washington — and numerous other states may follow.

Massachusetts sales tax is 6.25 percent, which is collected by local retailers and later paid to the state. Residents are supposed to report out-of-state purchases when filing their taxes each spring.

The coalition estimates Massachusetts will lose out on $335 million in sales tax revenue through online and catalog sales this fiscal year.

Without collecting sales tax, online retailers have a "head start" over locally based businesses, Hurst said.

"Ultimately, we want Congress to fix this," he said. "In the meantime, Massachusetts has a great opportunity to go after Amazon.com. ... This is an issue that needs to be taken care of and fixed right now."

Staff writer Bethany Bray can be reached at bbray@salemnews.com and on Twitter @SalemNewsBB.