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Massachusetts Promulgates Controversial Remote Vendor Nexus Regulation; Virginia E-Commerce Retailer Files Suit Protesting Constitutional Overreach

By 6 Mins Read

On September 22, 2017, the Massachusetts Department of Revenue (the “Department”) officially promulgated a remote vendor sales tax nexus regulation, 830 CMRH.1.7: Vendors Making Internet Sales (the “Regulation”).  The Regulation sets forth the following bright-line nexus threshold:

An Internet vendor with a principal place of business located outside the state that is not otherwise subject to tax is required to register, collect and remit Massachusetts sales or use tax with respect to its Massachusetts sales […] if during the preceding 12 months […] it had in excess of […]” (1) “$500,000 in Massachusetts sales from transactions completed over the Internet […]”; and (2) “made sales resulting in a delivery into Massachusetts in 100 or more transactions.

Has the Soda Tax Lost its Pop?

By 3 Mins Read

Cook County, Illinois lawmakers recently voted to repeal the nation’s largest soda tax only two months after it went live (the repeal scheduled to be effective at the end of Cook County’s fiscal year – November 30, 2017). And this is on the heels of a soda tax defeat in May of this year in Santa Fe, New Mexico, where voters rejected a local soda tax measure by a significant margin.  All of this hostility to the soda tax reached a crescendo in Michigan, where the legislature approved a bill to preemptively ban local governments from levying excise taxes on food, in response to the national trend of taxing sweetened beverages.  Michigan bill H.B. 4999 cleared the Senate on October 12, 2017 with a 30-5 vote, after passing the House on October 5, 2017. Specifically, the bill prevents localities from imposing taxes or fees on the sale, manufacture, or distribution of food, including beverages and chewing gum.

A New Trend in the Market: Sales and Use Tax Obligations Imposed on Marketplace Operators

By and 6 Mins Read

State efforts to undermine or challenge the Quill Corp. v. North Dakota, 504 U.S. 298 (1992) physical presence standard escalated this summer with the enactment of two sales and use tax laws targeting marketplace operators. Minnesota House File 1 (“H.F. 1”) and Washington House Bill 2163 (“H.B. 2163”), signed into law on May 30, 2017 and July 7, 2017, respectively, impose sales and use tax obligations on certain marketplaces that facilitate the sales of out-of-state third party retailers.  Minnesota and Washington are the first two states to enact such laws, and similar legislation is currently pending in the Pennsylvania General Assembly.

The Curious Case of the “No Regulation Without Representation Act of 2017” – Legislation Supporting Quill in the Kill-Quill Era

By 4 Mins Read

On June 12, 2017, Congressman Jim Sensenbrenner (R-WI) reintroduced into Congress H.R. 2887, also known as the “No Regulation Without Representation Act of 2017” (the “Legislation”), which codifies the physical presence nexus requirement established by the U.S. Supreme Court in Quill v. North Dakota, 504 U.S. 298 (1992) (“Quill”).  The Legislation is interesting for several reasons: (1) it proposes to employ a result that is the exact opposite of the recent trend to overturn Quill; (2) it defines “tax” broadly to include net income and business activity taxes; and (3) it expands the law to require a physical presence for states to regulate a person’s activity in interstate commerce outside of the tax context.

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