Does Amazon Charge Sales Tax in Massachusetts?

Sales Tax Regulations in Amazon

Technically speaking, Amazon does not charge sales tax. What Amazon can do is set up processes and systems through which taxes are applied to online transactions. Amazon has to comply with different state tax jurisdictions.

Items sold on Amazon Marketplaces and shipped to locations both inside and outside the US, including territories, may be subject to tax. The tax calculated on your order may change between the time you place an order and when your shipment is complete.

Implications of Sales Tax Collection

Shopping online in Massachusetts is about to get pricier for everyone. New regulations take effect Tuesday that require all remote sellers, such as third-party vendors on Amazon, and marketplaces to collect a 6.25% sales tax from all online purchases.

In a deal reached with Massachusetts regulators, Amazon will begin imposing a sales tax on all online purchases made by state residents as of November 1, 2013. Collecting sales tax puts Amazon at a disadvantage compared with smaller online vendors.

Sales Tax Nexus and Legislation

One issue is whether you have a sales tax nexus in a particular state. As part of the South Dakota Supreme Court v. Wayfair 2018 ruling, the classification of sales tax nexus was introduced. A sales tax nexus is a legal term for an online retailer making sales or having a presence in a region. If you have staff or maintain inventory in a state, you have a sales tax nexus.

When did Amazon start collecting sales tax in Massachusetts?

Amazon will begin collecting sales tax in Massachusetts beginning November 1, 2013. Amazon has agreed to start imposing a sales tax on all online purchases made by state residents.

Collaboration for Legislation

On Tuesday, both the governor and Amazon also said "they will work together toward enactment of federal legislation." The legislation would require remote online retailers to collect and remit state sales taxes.

Sales Tax Collection Expansion

Several states have begun requiring Amazon to collect online sales tax for purchases. This oftentimes makes prices higher than those of online shops, which sways shoppers to buy online. Members had been asking the governor for this deal for most of 2012.

Conclusion and Collection Protocol

Yet because most states tax most sales of goods and require consumers to remit use tax if sales tax isn’t collected at checkout, the only way to avoid sales tax is to purchase items that are tax exempt. Amazon is required to collect and remit sales tax on behalf of its marketplace sellers in some states. Twelve years ago California made a deal with Amazon to establish how to collect sales taxes for online purchases. Amazon will begin collecting sales taxes from all states with a sales tax as of April 1, 2017.

Many U.S. states have passed online shopping sales tax laws designed to compel Amazon.com and other e-commerce retailers to collect state and local sales taxes from its customers. While some people view paying sales tax as an annoyance, there are some benefits to doing so. For one, sales tax helps support important public services that everyone relies on, such as police and fire departments, schools, and hospitals.

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