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 has been involved in monitoring the progress of the Streamlined Sales Tax Initiative and has given talks and presentations on a variety of tax topics including Sarbanes-Oxley, drop shipments, the taxation of high technology transactions, and the growth of sales tax holidays. He is a lawyer and 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. Prior to joining Sovos Compliance, he worked as an arbitration attorney for John Hancock.More Content by Charles Maniace