Massachusetts' use tax is in the news again, as that state's highest court ruled today that the state can't collect taxes from a New Hampshire retail chain that sells tires to Massachusetts residents.
"The Legislature may, of course, enact such a presumption, but in the
absence of any such statutory authorization, it is error to rely on a
presumption that tires sold to a Massachusetts resident outside the
Commonwealth were actually used in the Commonwealth,'' according to the court's decision.
The case arose when, in 2003, a Massachusetts auditor found 313 invoices in a sample of sales records at three
Town Fair Tire Center stores in New Hampshire that listed
Massachusetts addresses for customers.
The Massachusetts Department of Revenue subsequently assessed $109,000 in uncollected
use taxes to Town Fair. That move was upheld by the Massachusetts
Appellate Tax Board. Town Fair then appealed to the state's highest court.
There are no constitutional issues to warrant further legal appeals, so now Massachusetts tax collectors must rely on cross-border tire buyers to pay any Bay State use taxes. As I noted in my post State use taxes tend to be useless, good luck with that.
You can read more about the case and today's court ruling in the Wall Street Journal, Boston Globe, the Massachusetts Lawyers Weekly and the Boston Business Journal.
Tires photo courtesy FreeFoto.com
