New Tax Collector in Town — Amazon

Online Inc. (NASDAQ: AMZN) has struck an agreement with the state of Massachusetts to begin collecting the state's 6.25% sales tax in the fall of 2013. As of September, the online behemoth was collecting sales tax in eight states, including New York, Texas, and California.

Amazon acquired software company Massachusetts-based Kiva Systems earlier this year, and the state argued that Amazon's physical presence in the state eliminated the existing exemption the company enjoyed from collecting state sales tax. The state figures that Amazon escaped paying an estimated $387 million in state sales taxes in 2011.

Online retailers, including Amazon, have resisted efforts to collect sales taxes, but their arguments are losing strength as some research in Texas has shown that customers rank paying sales tax at the bottom of their reasons for not shopping online. The impact on smaller retailers is more problematic, however, and federal legislation has stalled as lawmakers try to come to some agreement on how small is small enough to be exempt from collecting the state taxes.

Amazon's shares are trading up about 1.9% today at $252.40 in a 52-week range of $166.97 to $264.11.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Internet, Law, Regulation, Retail Tagged: AMZN
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