Mayors push Governor Patrick to advance Amazon tax talks
Apparently frustrated with the pace on Beacon Hill, eight mayors wrote to Gov. Deval Patrick last week urging his administration to "move aggressively" to reach a deal requiring the online retailer Amazon to begin collecting sales taxes before the Christmas shopping season begins.
The mayors, including Boston Mayor Thomas Menino and Salem Mayor Kim Driscoll, called small businesses the "lifeblood" of their communities, and argued that forcing Amazon to collect the state's 6.25 percent sales tax would put them on an equal footing with stores that routinely collect taxes at the point of purchase.
"They provide our citizens with full and part-time jobs, are the core of the commercial tax base, and form the vibrant center of our community downtowns," the mayors wrote.
Earlier this year, Amazon purchased a robotics company in North Reading and opened a research office in Kendall Square in Cambridge, establishing the "brick and mortar" nexus that local officials say should give the state the authority to force the company to collect the taxes from online shoppers.
More than a dozen states across the country, including many led by Republican governors, have reached deals with Amazon over tax collections, including Nevada and New Jersey. Amazon began collecting sales taxes in Texas on July 1, and this month started collecting taxes in California and Pennsylvania.
"We understand that the ultimate solution to this problem rests with the federal government and we hope, in time, it acts appropriately to correct this imbalance. But Congress is not going to act unless pushed, and Massachusetts — like we have on health care reform and many other issues in the past — can once again demonstrate national leadership on this vital issue," the mayors wrote.
The mayors of Boston, Salem, Braintree, Easthampton, Malden, Methuen, Peabody and Revere signed the letter.
In June, Gov. Patrick called tax agreements between states and Amazon "delightful and encouraging" and said his administration would begin talks with Amazon. But Patrick said last week that he had not spoken to Amazon's CEO although talks had begun at the staff level.
"It's got to start there, so one step at a time," Patrick said last week.
Asked about the request from the mayors, administration officials on Wednesday were not available to detail how far talks have progressed, or who is involved at this point in the negotiations.
The Massachusetts Main Street Fairness Coalition, a group of retailers, local elected officials, labor unions and trade associations, launched a website — massmainstreet.com — two weeks ago encouraging residents to contact Gov. Patrick and members of Congress about the issue.
Online retailers have been protected from collecting state sales taxes since a 1992 Supreme Court ruling said they had to collect sales tax in states where they have a physical presence.
According to the Alliance for Main Street Fairness, Massachusetts has lost out on $600 million in sales tax collections from e-commerce since 2007, including $132 million in 2012 and $116.8 in 2011.
The Massachusetts Main Street Fairness Coalition estimates that by forcing Amazon to collect and remit sales taxes on purchases made by Massachusetts customers, the state could realize between $25 million and $45 million in additional annual tax revenue.
In some states, deals with Amazon to begin collecting sales taxes have been contingent upon helping the company build new distribution centers. Part of Gov. Chris Christie's agreement in New Jersey for Amazon to begin collecting that state's 7 percent sales tax next summer hinged on tax incentives to help finance the construction of two warehouses. Amazon agreed to invest $130 million in the state on the new facilities, creating 1,500 full-time jobs.