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The Los Angeles Times yesterday ran an eye-popping story reporting that giant internet retailer Amazon, which has steadfastly refused to act as a sales tax collector for states, is now working the other side of the street and is selling its services as a tax collector for other merchants who sell products through its site.

Amazon "is now offering to handle sales-tax chores for merchants who sell products through its site for a fee equivalent to 2.9 percent of the taxes collected," the Times reported.

The irony here is that Amazon has been at the forefront of internet retailers who have vigorously opposed efforts to make them sales tax collectors.

The LA Times called the company's decision to sell itself as a tax collector "an abrupt about face."

In California, Amazon agreed this year to abandon an effort to repeal a new Internet sales tax law passed by the state legislature and instead agreed to start collecting and remitting California's 7.25 percent sales tax, plus local taxes, beginning September 15, 2012.

In the past few months, the company's executives have said they would prefer to see national internet sales tax legislation passed, rather than have individual states pursue their own policies.

Amazon does not collect sales tax on items it ships into Massachusetts because the company has no physical presence (warehouses, distribution centers) in the state. 

(Editor's Note: On November 10, the Associated Press reported that momentum is growing in Congress, with evidence of bipartisan support, for legislation to require internet retailers to collect sales tax.)

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