Ever since the U.S. Supreme Court overturned the physical presence nexus requirement for state sales and use taxes in South Dakota v. Wayfair, 138 S. Ct. 2080 (2018), taxpayers and practitioners have questioned the extent to which the Court’s holding applies to locally administered sales and use taxes. This question is often rooted in the Court’s statement in Wayfair that “States may not impose undue burdens on interstate commerce” and its reference to Pike v.…
We previously reported on the Massachusetts Department of Revenue’s Directive 17-1 (the “Directive”), setting forth the Department’s bright-line nexus threshold for internet vendors, effective July 1, 2017. Specifically, the Directive provides that an internet vendor with a principal place of business located outside of Massachusetts is required to register, collect and remit Massachusetts sales or use tax with respect to its Massachusetts sales if it: (1) had Massachusetts sales in excess of $500,000 during the…
On April 3, 2017, the Massachusetts Department of Revenue (the “Department”) issued Directive 17-1 (the “Directive”), setting forth the Department’s bright-line nexus threshold for internet vendors, effective July 1, 2017. Specifically, the Directive provides that an internet vendor with a principal place of business located outside of Massachusetts is required to register, collect and remit Massachusetts sales or use tax with respect to its Massachusetts sales if it: (1) had Massachusetts sales in excess of $500,000 during the preceding calendar year; and (2) made 100 or more sales for delivery into Massachusetts during the preceding calendar year. For the short period between July 1, 2017 and December 31, 2017, the Department will review whether these sales thresholds were met between July 1, 2016 and June 30, 2017.
After years of litigation, injunctions, and a U.S. Supreme Court decision, the controversy between Data & Marketing Association (“DMA”) (formerly Direct Marketing Association) and the State of Colorado has come to a conclusion. On February 22, 2017, DMA and the Colorado Department of Revenue (the “Department”) entered into an agreement (the “Settlement Agreement”) resolving the dispute in Direct Mktg. Ass’n v. Colo. Dep’t of Revenue, Colo. Dist. Ct., No. 13-CV-34855, which involved a challenge to the Colorado use tax reporting requirements enacted in 2010. (The Settlement Agreement is available at http://thedma.org/wp-content/uploads/DMA-Colorado-Executed-Settlement-Agreement.pdf.) Under the Settlement Agreement, the Department agrees that compliance with those use tax reporting requirements will not be required until July 1, 2017 and agrees to waive any and all penalties for non-collecting retailers who failed to comply with the use tax reporting requirements prior to July 1, 2017. So on July 1, 2017, a new day of use tax notification and reporting enforcement will dawn in Colorado – and it would not be surprising if other states follow suit.