By Bob Katzen
Bill (H 1524) – Requires the state to plan and prepare to collect the state’s 6.25 percent sales taxes on all items purchased online if and when the federal government authorizes states to mandate that Internet sellers collect sales taxes. Federal law currently only requires the sales tax to be collected by sellers who have a physical presence like a store or warehouse in the state. Amazon has a presence in the Bay State and since 2013 has charged Massachusetts residents the sales tax for its online sales.
Under current state law, a Massachusetts resident who buys a taxable item online is required to take the initiative and pay the 6.25 percent sales tax upon filing of his or her state tax return. But few ever do so.
Supporters of the tax say brick-and-mortar retailers in the state are losing millions of dollars in annual sales and the state is missing out on millions in tax revenue. They note consumers often go to brick-and-mortar retail stores to look at items and then buy them on the Internet to get a lower price and save the sales tax.
Opponents say this is nothing more than a backdoor tax hike that will cost consumers millions of dollars. They note it would also discourage other online retailers from bringing a facility and jobs to Massachusetts and argue that the last thing the state’s taxpayers need is a tax increase during this recovering economy.
The Revenue Committee last year recommended approval of the same bill but it was sent to a study committee where it died.