Court case could affect sales tax paid for online purchases made pre-Wayfair in MA
Keep an eye on any online purchases you’ve made in the past several years in Massachusetts. They may end up being subject to retroactive sales and use tax pending a state Supreme Judicial Court decision.
The state’s high court has accepted an appeal request from an online retailer in a case to define what establishes the “physical presence” guidelines required to establish nexus in a state, pre-Wayfair.
Previously, the Dept. of Revenue claimed the retailer had to collect tax on purchases made by customers in Massachusetts because it placed “cookies” on their internet devices prior to purchase and also allowed them to use apps. Those cookies and apps gave the retailer physical presence in the state, the department said.
While the state’s tax appeals board sided with the retailer, saying apps and cookies didn’t establish physical presence for tax purposes, the department submitted another appeal to an appeals court. This prompted the retailer to submit the case to the higher court, and the state supreme court accepted the appeal.
We’ll keep you posted on the decision.
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