A Massachusetts coalition of small businesses, elected officials and labor unions has called on the state to force online giant Amazon.com Inc. to collect sales tax on purchases.
The Massachusetts Main Street Fairness Coalition penned a letter Thursday to Amy Pitter, the state's Department of Revenue Commissioner, demanding action in correcting what they say is a "disparity in state sales tax collection."
In the letter, the group urges the commissioner to force the company to collect the state's 6.25 percent sales tax by July 1, saying local businesses are struggling to compete with tax-free online merchants.
Currently, Amazon, which is in the process of opening an office in Cambridge, does not collect the Massachusetts sales tax for purchases made by state residents.
Because Amazon has an office in Massachusetts, the coalition said, the online giant should be subject to the same tax requirements that other physical businesses are throughout the state.
"Forcing Amazon to play by the same rules as everyone else would create a level playing field for our small Main Street retail businesses," the group said in their letter.
Under state law, residents are required to pay taxes on items bought online that the seller doesn't automatically collect.
Dan Bertrand, a spokesman for the Massachusetts Department of Revenue said his office does not comment on individual taxpayers.
According to the National Conference of State Legislatures, Massachusetts is estimated to lose $268 million in tax revenue in 2012 from not being able to collect sales tax for online and catalog purchases.
Federal legislation that would close the tax loophole for online companies is being considered by Congress. Meanwhile, state lawmakers in Massachusetts are reviewing a similar proposal.
Amazon did not respond to requests for comment.
The coalition's urging comes shortly after New Jersey announced Amazon, which is set to build two distribution warehouses in the state, will begin collecting the state's sale tax for online purchases in 2013.