Big Sales Tax Win for Out-of-State Sellers


Fresh off its role as local counsel to ensure that nearly $3 billion of surplus taxes in Massachusetts be credited to the people who paid them, the New England Legal Foundation (NELF – is reporting what it calls another  year-end win for taxpayers in the state’s highest court.

The Massachusetts Supreme Judicial Court (SJC) issued a decision yesterday, Dec. 22, in U.S. Auto Parts v. Commissioner of Revenue denying the taxman’s attempt to tax internet sales by a company with no physical presence in the Bay State. The Court noted that “the existence of what the Commissioner [of Revenue] described as ‘electrons’ in the Commonwealth does not satisfy the applicable ‘physical presence test,’” and it ruled in favor of the relief from sales taxes requested by the online seller.

The SJC cited language from the United States Supreme Court decision in the 1917 case, Gould v. Gould, that “[i]n the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used. … In case of doubt[s], they are construed most strongly against the Government, and in favor of the citizen.”

“This week’s decision is a win for interstate commerce as well as for taxpayers,” noted NELF President Dan Winslow. “In the New Year, NELF will continue to advance free enterprise and limited government based on rule of law in New England, and we will push back against government overreach by our advocacy in the state and federal courts.”

The NELF amicus brief was authored by Senior Staff Attorney Ben Robbins. “We are grateful to Ben for submitting a compelling and persuasive brief for the Court’s consideration,” said Winslow, “and we appreciate the acknowledgement of our amicus brief by the Court in its decision.”

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