Municipal advocates hope Amazon.com's agreement to start collecting Massachusetts sales taxes will result in more aid for struggling cities and towns, while Bay State retailers welcomed a more level playing field with the world's largest online seller.
Brookline Booksmith co-owner Dana Brigham called the news "fantastic."
"It takes away at least one of the reasons that people find Amazon so much cheaper than bricks-and-mortar stores," she said. "It's a competitive advantage that they have had every day that they've been in business."
Amazon signed an agreement with the state Department of Revenue to start collecting the 6.25 percent state sales tax on online purchases made by Massachusetts customers beginning Nov. 1, 2013.
The announcement comes amid a prolonged slump in state tax revenue. The DOR estimates the collections will net additional state tax revenue in the low tens of millions of dollars in the first year and continue to grow.
"It's good news," said Geoffrey Beckwith, the Massachusetts Municipal Association's executive director. "It's clear that state tax revenues are not coming in an adequate level to support the budget, which is why the governor instituted budget cuts last week."
Local aid is down 32 percent, or $416 million, since 2008, Beckwith noted. "If the Internet loophole can be closed, perhaps we can reverse that," he said.
The state pledged to work with Amazon on federal legislation authorizing states to require all catalog and Internet sellers to collect state sales taxes.
The Massachusetts Main Street Fairness Coalition — comprised of retailers, local elected officials and other groups — had been pushing Gov. Deval Patrick for a deal this year after Amazon opened a Cambridge software office and bought a North Reading robotics company. Amazon had agreed to collect sales taxes in other states where it has offices.
The state's announcement said Amazon plans to "create hundreds of high-tech jobs in Massachusetts in coming years." Jay Gonzalez, the state's administration and finance secretary, said Amazon is interested in expanding its presence in Massachusetts, but could not provide specifics. Amazon declined comment.
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