The state’s trying to lure Amazon to Mass. But it’s also taking the company to court
Even as state officials work on their pitch to Amazon to make Massachusetts its second home, they’re also taking the e-commerce giant to court.
The state Department of Revenue asked a judge Monday to order Amazon to turn over records regarding third-party vendors in Massachusetts, part of a bid to collect sales taxes from those vendors.
The request comes after three conference calls during which Amazon did not produce the documents and “even stated that they did not intend to produce” them, according to a filing in Suffolk Superior Court. An Amazon spokeswoman declined to comment.
The suit could complicate the state’s bid to bring Amazon’s “second headquarters” — and a projected 50,000 jobs over 15 to 20 years — to Massachusetts. Boston has been considered a strong contender for the much-prized project, and proposals are due Oct. 19. In its request for proposals, Amazon lists “a stable and business-friendly environment” as a “high priority.”
Jay Ash, Governor Charlie Baker’s economic affairs secretary and the governor’s point person on the Amazon hunt, declined to comment on the court action.
A Baker spokesman sent a statement by e-mail that skirted the legal challenge. “The Baker-Polito administration is aggressively pursuing the Amazon project by working with local officials from across Massachusetts and our partners in the Legislature to demonstrate why the Commonwealth’s nation leading schools and highly skilled workforce are the best fit for Amazon,” spokesman Billy Pitman said.
The Revenue Department called the matter a “routine summons for information” but declined to comment further.
Observers said that while the suit wouldn’t make Amazon feel warm and fuzzy about Massachusetts, it’s unlikely to be a deal-breaker for the headquarters project.
“Does it help? Absolutely not. Does it hurt? That’s a tough question,” said David Begelfer, chief executive of real estate trade group NAIOP Massachusetts. “Amazon’s a big boy, and they’re dealing with these issues in many places. If they’re interested in our labor market, I doubt they’re going to cut off their nose to spite their face.”
As it has grown to become the nation’s largest online retailer, Amazon has periodically sparred with states over sales taxes, which it long avoided collecting. Earlier this year, the company agreed to collect sales tax on its own goods nationwide, but that agreement didn’t cover third-party vendors who sell through the website — business that, by some estimates, accounts for half of its sales.
In August, the Revenue Department issued a summons asking Amazon to turn over records listing third-party vendors who stored goods at Amazon facilities in Massachusetts over the last five years. Amazon, the state said, refused to do so.
Also in August, the state of South Carolina sued Amazon over the issue, saying the company owed $12.6 million in uncollected taxes from third-party vendors in the first three months of 2016. Amazon has said it will “defend ourselves vigorously” in that case.