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Sales tax takes effect for Mass. Amazon shoppers

As the holiday shopping season nears, many online shoppers in Massachusetts may notice more expensive price tags on Amazon.com.

The website began collecting sales tax on Friday due to an agreement made between the company and the Commonwealth in December 2012.

The policy change marks Massachusetts’ first attempt to apply to an online retailer the same 6.25 percent sales tax collected from traditional brick-and-mortar stores, whose physical presence within state lines compels them by law to collect such taxes.

“Retailers, whether they’re selling from a store or via the Internet, should all face the same tax,” said Laurence Kotlikoff, a professor of economics at Boston University. “At the minimum, there should be an equal playing field. You could argue that online sellers should face an actual tax, that they should be facing a higher tax because they’re eliminating the community aspects of life.”

Amazon did not return calls or emails seeking comment.

The tax applies only to purchases made of goods sold by Amazon itself, not third parties using the site, and it is projected to contribute $36.7 million to government funds for the next fiscal year ending June 30, according to a representative from the Mass. Department of Revenue.

No federal law exists that requires online vendors to collect sales tax, but Massachusetts is one of 16 states that independently mandate it, according to Amazon’s website.

The move to get a national mandate is ongoing, but Kotlikoff said there has already been significant damage to local economies in the interim.

“These online sales have basically undermined urban life, and created and contributed to suburban sprawl and eliminated some of the things that made living in a city or a town a right,” he said. “Had we known going into this that Amazon would do that, I don’t know how many people would have supported the lack of taxation of Amazon sales. They might even have banned Amazon to begin with.”

Several residents said they could understand the need to have equal business laws, but did not want to pay the tax.

Kristine Ustas, 20, of Bay Village, said she uses, Amazon about three times a month and was irritated about the online sales tax.

“It’s pretty messed up,” she said. “I could go pretty much anywhere else to get that stuff. It’s just out of convenience that I use Amazon, so the fact that Massachusetts is trying to profit on that kind of bothers me. If it’s online, then it shouldn’t be subject to Massachusetts state tax because it’s online. It’s virtual. They aren’t residents. They’re not paying rent here.”

However, Ustas said she would most likely continue to use Amazon just as much.

“At the end of the day, it doesn’t bother me enough to stop using Amazon, but now that I know about it, in the back of my mind, I’m a little bothered by it,” she said.

Lisa Lach, 24, of Allston, said she disapproved of the tax, but Amazon was too useful not to use.

“It [the tax] is annoying, but I guess it’s to be expected,” she said. “I don’t think I’d stop using Amazon because of the tax because it doesn’t change how convenient the company is.”

Seth Kellas, 28, of Brighton, said the tax funds would benefit projects in the Commonwealth, but it would not prevent him from using the site any less.

“It’s been nice that we’ve been able to get the loophole of not paying taxes, but if it’s going to help. . . it’s definitely worth it [the tax],” he said. “The small mom and pop operations around here won’t see much of a difference unfortunately. What I would buy locally, I’m still going to buy, but for the money I have to burn on luxuries, online is still a mainstay.”

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