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May 21, 2013

City urges changes in state sales tax rules

Gloucester officials are urging local state legislators to use revenue from a potential online sales tax to reduce the state sales tax, and the city is prompting other Cape Ann communities to do the same.

A letter, written by City Clerk Linda Lowe last month on behalf of the City Council, which approved a resolution, asks State Sen. Bruce Tarr, R-Gloucester, and state Rep. Ann Margaret Ferrante, D-Gloucester, to advise their legislative colleagues to support the lowering of the sales tax if an Internet sales tax gains state approval.

And Ward 5 City Councilor Greg Verga — who is running for an at-large seat — is urging officials in neighboring communities to adopt the resolution as well.

Verga has also reached out to state Rep. Bradford Hill, the Ipswich Republican whose district includes Manchester, as well as to city and officials in Beverly, Salem, Rockport and Manchester.

He said the idea would hopefully snowball and gain support through local legislators and officials from municipalities across the state.

The proposal to scale back the state sales tax comes as legislators are considering whether Massachusetts will join a growing number of states in collecting online sales tax dollars.

Earlier this month, the U.S. Senate, on a vote of 69-27, approved a bill giving states the choice of taxing online sales, though some conservatives feel a similar bill will be a tougher sell in the House.

Under current law, states can only require retailers to collect sales tax if the store has a physical presence in the state.

In 2012, Internet sales in the country rose by nearly 16 percent, with sales totaling $226 billion, according to government estimates. In all, states lost a total of $23 billion last year due to out-of-state sales — about half of which were via Internet sales, according to the National Conference of State Legislatures, which lobbied for the national bill.

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