Amazon Agrees to Collect Sales Tax in Massachusetts

Paul Lilly

Effective November 1, 2013, Amazon will collect sales tax from 6.6 million Massachusetts residents.

Unfortunately for residents of Massachusetts, Amazon and state officials have struck an agreement for the online retailer to collect sales tax in the state, and no amount of tossing tea into the Boston Harbor is going to change that. If it would, Amazon would probably join in, because terms of the deal could potentially place the company at a competitive disadvantage with other online sellers.

According to The Wall Street Journal , the sales tax agreement only applies to Amazon, leaving the company vulnerable to other online sellers who could swoop in with lower prices. It seems unfair to Amazon, but the reason it was targeted is because of its size. Amazon is the biggest online retailer in the world.

"It has become a little anachronistic to not collect this tax," Jay Gonzalez, secretary for the Massachusetts Office for Administration and Finance, told WSJ . "Getting an agreement with Amazon is meaningful to Massachusetts."

Amazon maintains it offers the lowest prices around, even in states where it's agreed to collect sales tax. That number is growing, with Amazon now charging sales tax in eight states, including California, Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas, and Washington. Massachusetts will be added to the list beginning November 1, 2013, along with Tennessee, Texas, Indiana, Nevada, New Jersey, South Carolina, and Virginia in the years ahead.

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