“I value the contributions large and small employers alike make to Massachusetts’ economic vitality, and this agreement captures that,” said Gov. Deval Patrick. “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.”
In spite of the agreement, an exec for Amazon admits in a statement that “Federal legislation is the only way to level the playing field for all sellers, the only way for states to obtain more than a fraction of the sales tax revenue that is already owed, and the only way to fully protect states’ rights.”
Like in other states where it does not collect sales tax, Amazon had long claimed it did not need to collect those taxes because it had no physical stores in Massachusetts. Consumers are still required to pay that tax when they file their tax returns, but an overwhelming majority of them do not.
But earlier this year, Amazon purchased a Massachusetts company called Kiva Systems and is opening an office in Cambridge. Thus, the state argued that the company could no longer claim “no physical presence.”
In just the last year, Amazon has agreed to collect sales tax in several states, including California, Pennsylvania, and Texas.