BOSTON-It only takes a minute to point, click and enter your credit card information for the latest best-seller to arrive on your doorstep the next day or download to your Kindle. The ease of online shopping – and the absence of sales tax – makes it more appealing than ever to buy online.
But according to an estimate from the National Conference of State Legislatures that was submitted to state lawmakers on Thursday, online giants such as Amazon and Overstock could cost Massachusetts as much as $335 million next year in unrecovered sales taxes.
Advocates for local merchants came to the hearing held by the Legislature’s revenue committee to push for a bill that would make Massachusetts-based affiliates who market goods on behalf of online retailers subject to the same 6.25-percent sales tax as brick-and-mortar shops. If passed and signed by Gov. Deval Patrick, Massachusetts would be the fifth state to adopt such a law.
“This is a fairness issue, plain and simple,” said Thomas DeSimone, an executive at WS Development in Chestnut Hill.
DeSimone, whose firm built Derby Street Shoppes in Hingham, said shops within communities have a competitive disadvantage when they are facing online-only retailers that don’t have to collect the sales tax.
“Last time I checked, the state was looking for a few bucks. This is $250 million we are talking about,” DeSimone said.
DeSimone pointed out the importance of the retail industry as an employment engine; more than 300,000 people work in the retail sector in Massachusetts.
Others spoke of local stores being pushed aside by online retailers. “These jobs are diminishing,” said Rep. James Cantwell, a Democrat from Marshfield who sits on the committee and supports the bill.
Cantwell said local businesses support their communities and the sales tax goes back into the state. “Amazon does not support Marshfield Little League,” he said. “Our Main Street retailers are at a huge competitive disadvantage, because we in essence are giving tax breaks to every single online company.”
But the bill also has its critics. Eileen McAnneny, with Associated Industries of Massachusetts, said the measure could result in double taxation in some cases. “There’s a lot of overlap and a lot of confusion,” she said. “A better way to do it would be with a federal law change.”