Massachusetts Governor Proposes Sales Tax Modernization Initiatives

Massachusetts Governor Charlie Baker’s recent FY2021 budget proposal includes sections aimed at modernizing and improving the integrity of sales tax collection in the Bay State. The proposal takes a two-phased approach to modernization in order to improve the speed of current collection and remittance methods.

Phase 1: Businesses will be required to remit collections from the first three weeks of each month in the final week of that same month. Remittance for the final week and reconciliation of the monthly filing will continue to occur in the following month.

Phase 2: Beginning in 2023, all retailers and credit card processors will capture sales tax from electronic transactions at the moment of purchase and remit daily.

In an effort to improve the integrity of the sales tax collection process the budget proposal establishes civil penalties for the sale and installation of automated sales suppression devices or “zappers,” which are software programs that falsify electronic records for purposes of tax evasion.

For more information the full text of the governor’s budget can be found here.

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Author

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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