If you recently bought the bestselling book, The Hunger Games, the price of the paperback book on Amazon.com is currently $5. The price of the book at your local bookstore (Willow Books & Café) is $8.99.
Yes, the online price is cheaper. But even more: you didn't have the pay the 6.25 percent state sales tax on top of that higher price.
David Didriksen, owner of Willow Books & Café in Acton claims it is an unfair advantage that online retailers like Amazon get to avoid collecting state sales tax.
“It is a competitive advantage for Amazon because they don’t charge any sales tax and they spend millions and millions of dollars a year fighting this all across the country because they know it’s a competitive advantage,” said Didriksen.
Didriksen and Salem Mayor Kim Driscoll co-chair the Massachusetts Main Street Fairness Coalition, a group that calls for online retailers to be be required to collect state sales tax. In 1992, the U.S. Supreme Court ruled that retailers without a physical presence in a state are not required by law to collect that state's sales tax.
“The Supreme Court decision was made way before the Internet really even happened,” said Didriksen. “They are using this loophole to not collect tax. But take Staples for example, the number two online retail site, they collect tax and Barnes & Noble collect tax – Amazon is one of the only ones who doesn’t do it.”
That may be because if a company has a physical presence in a state, as Staples and Barnes & Noble do, then they must collect sales tax.
Which brings us to Amazon, the Goliath of online retailers. Amazon is buying a mobile-robotic solutions company based in North Reading, Kiva Systems Inc., for $775 million.
Amazon is also said to be considering purchasing a space in the Cambridge Innovation Center.
The Main Street Coalition held a press conference at the Harvard Book Store in Cambridge this morning to illuminate what it says is the importance of having state and federal legislation to address this issue.
“You make choices in life about where you want to spend your resources,” said Didriksen. “If you want to have all retail stores go away, where you have to get everything online, then by all means, buy everything online. If you think that there is some value in having local businesses that employ local people and make contributions for the local community then you should really frequent your local business community.”
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