Wednesday, November 20, 2013

Amazon Sales Tax Agreement

On December 11, 2012, the Governor's Office announced that an agreement had been reached that would see Amazon collecting sales taxes on purchases made on-line after November 1, 2013.

Although the issue may now be moot, an email to Amazon confirms that sales taxes will be collected as of the date of delivery - not the date of the order. 

For those wishing to know more about the agreement, it appears that a copy is not available to the general public.  In response to a request for a copy of the agreement, the following was received from Kevin W. Brown, General Counsel for the Massachusetts Department of Revenue:
"The document to which you refer is not a public record.  It is a tax settlement agreement subject to the confidentiality provisions of G.L. c. 62C, s. 21.  Consequently, the Department is not able to provide you with a copy."

The issue of states compelling internet vendors to collect state sales taxes has already quite a long history, involving not only state action, but also United States Supreme Court decisions and federal legislation.  The two controlling Supreme Court decisions are National Bellas Hess v. Department of Revenue, 367 U.S. 753 (1967) and Quill Corporation v. North Dakota, 504 U.S. 298 (1992).  Currently working its way through Congress is the  Marketplace Fairness Act of 2013

For an informative overview of the issue the reader is referred to the following two articles:

1.     Emily L. Patch, On-Line Retailers Battle With Sales Tax:  A Physical Rule Living in a Digital    World, 46 Suffolk U.L.Rev. 673 (2013).  

2.     David Gamage and Devin J. Heckman,   A Better Way Forward for State Taxation of E-Commerce, 92 B.U.L.Rev. 483 (March 2012).

Both articles are available on the Massachusetts Trial Court Law Libraries website from the HeinOnline database .  A library card is required for access.