How Has the Massachusetts Economic Nexus Changed?

Erik Wallin
November 5, 2020

Prior to the South Dakota v. Wayfair, Inc. decision, the Commonwealth of Massachusetts had updated its economic nexus provisions to include economic nexus as well as “cookie nexus,” which allowed internet cookies on customer devices to trigger nexus in a jurisdiction. Since that time, the Massachusetts Department of Revenue updated details on the Massachusetts economic nexus in 2019. We have highlighted several key points for remote sellers and marketplace facilitators.

Enforcement date:
October 1, 2019.

Sales/transactions threshold:

Measurement period:
Threshold applies to the previous or current calendar year.

Included transactions/sales:
Retail sales of tangible personal property delivered into the state.

When You Need to Register Once You Exceed the Threshold:
If remote seller or marketplace sales exceeded $100,000 prior to November 1 of that preceding year, the seller or marketplace must begin collection and remittance as of January 1. If those sales exceeded $100,000 after November 1 of that year, the seller or marketplace must collect and remit as of the first day of the first month beginning two months after the month when the threshold was exceeded.

Summary: Prior to October 1, 2019, a seller was obligated to collect Massachusetts tax if they deposited cookies (bits of software that facilitate user experience on a website) on the devices of Massachusetts residents and made more than 100 transactions or $500,000 in revenue from Massachusetts customers. Massachusetts marketplace liability rules require “marketplace facilitators” and “remote marketplace facilitators” with sales exceeding $100,000 to report, collect, and remit on all such sales, whether such sales are direct sales by the marketplace facilitator or sales facilitated for a marketplace seller.

Massachusetts Sales Tax Resources: Be sure to reach out to one of our experts for the latest information on Massachusetts economic nexus sales tax changes. Take a look at our interactive sales tax nexus map for real-time data on other states as well.

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Erik Wallin

Erik Wallin is a Senior Tax Counsel on the Tax Research Team at Sovos Compliance. Erik has been with Sovos Compliance since 2011, and his main areas of focus are on U.S. Transaction Tax Law which includes special expertise in the taxation of technology and the taxation mechanisms that apply throughout the Colorado home rule jurisdictions. Erik is a member of the Massachusetts Bar, has a B.A. from York College of Pennsylvania, a J.D. from New England School of Law, and an LL.M. in Taxation from Boston University.
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