On the heels of enacting Regulation 830 CMR 64H.1.7, which details how e-commerce sellers may have a sales tax collection and remittance obligation in Massachusetts, a Massachusetts judge has ordered Amazon.com to disclose the identity of all third-party sellers who utilize the Amazon marketplace and had their inventory stored in the Amazon warehouse facility in Massachusetts going back to 2012.
The reason behind the request is clear – well settled law dictates that storing inventory in a jurisdiction creates an obligation to collect sales tax. Any seller is potentially subject to audit liability if they are not meeting this requirement.
How Amazon chooses to react to this demand is not yet known. However, if your organization uses the Amazon Marketplace or otherwise has nexus with Massachusetts but are not yet collecting, consider taking advantage of the Multistate Tax Commission Amnesty program which could provide possible protection from penalty and interest assessments. The program ends on October 17, so immediate action may be required.
About the Author
Charles Maniace is the Director of Regulatory Analysis at Sovos. An attorney by trade, Chuck leads a team of attorneys and tax professionals responsible for all the tax and regulatory content that keeps Sovos clients continually complaint. Over his 15 year career in tax and regulatory automation, he has given talks and presentations on a variety of topics including The Taxation of High Tech Transactions, The Taxation of Remote Commerce, The Regulatory Implications of Brexit, The Rise of E-Audits, Form 1042-S Best Practices and Penalty Abatement Practices for Information Returns. Chuck is a member of the Massachusetts Bar and holds a BS in Business Economics from Bentley College, a JD from Boston University School of Law, and an LL.M in Taxation from Boston University School of Law.More Content by Charles Maniace