Code of Massachusetts Regulations › 830 CMR - DEPARTMENT OF REVENUE › Title 830 CMR 64H.00 - Sales and Use Tax › Section 64H.1.9 - Remote Retailers and Marketplace Facilitators

Current through Register 1525, July 5, 2024
(1)
Statement of Purpose;
			 Background, Outline of Topics; Effective Date
.
(a)
Statement of
			 Purpose
. The purpose of 830 CMR 64H.1.9 is to explain the
			 Massachusetts sales and use tax registration and collection obligations of
			 remote retailers, which include both remote marketplace sellers and remote
			 marketplace facilitators. 830 CMR 64H.1.9 also includes an explanation of the
			 registration and collection obligations of in-state marketplace
			 facilitators.
(b)
Background
. A vendor making taxable sales in the
			 Commonwealth or selling taxable tangible personal property or services for use
			 in the Commonwealth is required to collect the sales or use tax when it is
			 "engaged in business in the Commonwealth" within the meaning of M.G.L. c. 64H,
			 § 1. In general, this statutory provision is construed to impose a
			 collection duty to the fullest extent permitted by the U.S. Constitution and
			 federal law.
Remote retailers that have no traditional in-state contacts
				(
i.e
., generally, stores, employees, inventory,
				representatives,
etc
.) are generally required to collect sales
				or use tax as vendors when they exceed $100,000 in Massachusetts sales in a
				calendar year. Such retailers may sometimes sell their products and services
				through intermediaries, known as "marketplace facilitators."
Marketplace Facilitators facilitate sales on behalf of
				third-party vendors, or "marketplace sellers", and in some cases may also make
				direct sales on their own behalf. Marketplace facilitators that have no
				traditional in-state contacts are themselves "remote" retailers both as to
				their direct sales and the sales that they facilitate. Such remote marketplace
				facilitators are required to collect sales or use tax as vendors when they
				exceed $100,000 in total Massachusetts sales in a calendar year. Such total
				Massachusetts sales includes the marketplace facilitator's direct Massachusetts
				sales and the Massachusetts sales that it facilitates on behalf of marketplace
				sellers.
Marketplace Facilitators that have traditional in-state
				contacts are required to collect sales or use tax on all of their direct sales.
				Such facilitators are also required to collect sales or use tax on the sales
				they facilitate when such sales exceed $100,000 in total Massachusetts sales in
				a calendar year. Such total Massachusetts sales includes the marketplace
				facilitator's direct Massachusetts sales and the Massachusetts sales that it
				facilitates on behalf of marketplace sellers.
Marketplace Facilitators may facilitate sales on behalf of
				marketplace sellers that are either remote retailers or in-state retailers. In
				either case, when a marketplace facilitator is required to collect sales or use
				tax on behalf of a marketplace seller, the marketplace seller is generally
				relieved of the sales or use tax compliance obligation with respect to such
				sales when it takes in good faith a marketplace facilitator's collection
				certificate.
(c)
Outline of Topics
. The following is a list of sections
			 contained in 830 CMR 64H.1.9:
1. Statement of
			 Purpose; Background; Outline of Topics; Effective Date;
2. Definitions;
3. General Rules;
4. Marketplace Facilitator
			 Exceptions;
5. Marketplace
			 Facilitator Administrative Rules;
6. Applications for Waiver;
7. Tax Registration, Returns and
			 Payments;
8. Marketplace
			 Facilitator Liability Relief;
9. No
			 Limitation on Other Authority; and
10. No Effect on Outstanding Tax
			 Liability.
(d)
Effective Date
. 830 CMR 64H.1.9 is effective as of
			 October 1, 2019. The rules that explain when a remote retailer, including a
			 remote marketplace facilitator, or an in-state marketplace facilitator, is
			 required to register, collect and remit sales or use tax are stated at 830 CMR
			 64H.1.9(3).