Posts tagged "1012417"

D & H Distributing Company v. Commissioner of Revenue (Lawyers Weekly No. 10-124-17)

NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030;   SJC-12260   D & H DISTRIBUTING COMPANY  vs.  COMMISSIONER OF REVENUE.       Suffolk.     April 3, 2017. – July 31, 2017.   Present:  Gants, C.J., Lenk, Hines, Gaziano, Lowy, Budd, & Cypher, JJ.     Taxation, Sales and use tax.  Internet.  Constitutional Law, Commerce clause, Interstate commerce, Taxation.  Interstate Commerce.       Appeal from a decision of the Appellate Tax Board.   The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.     Philip S. Olsen (Jonathan A. Block also present) for the taxpayer. Julie E. Green, Assistant Attorney General, for Commissioner of Revenue.          CYPHER, J.  If a consumer enters his or her neighborhood sporting goods store in Massachusetts and purchases a baseball glove, the store, as the “vendor,” collects the Massachusetts sales tax owed from the consumer and remits it to the Department of Revenue (department).  See G. L. c. 64H, §§ 1, 2.  This case evaluates a more complex transaction in which a Massachusetts consumer instead finds a hypothetical baseball glove online, and purchases it from an out-of-State retailer who then orders the glove from a Massachusetts wholesaler and directs the wholesaler to deliver the glove directly to the doorstep of the Massachusetts consumer.  In that more complicated transaction, known as a “drop shipment sale,” the wholesaler is considered to be the vendor, and is obligated to collect sales tax and remit it to the department. The taxpayer, D & H Distributing Company (D & H), is a company in the position of the hypothetical wholesaler just described.  It appeals from a decision of the Appellate Tax Board (board) in which the board concluded that under a provision of the Massachusetts sales tax statute known as the “drop shipment rule,” D & H was responsible for collecting and remitting the sales tax due on products it sold to the out-of-State retailers and then delivered to consumers.  G. L. c. 64H, § 1.  We agree with the board’s conclusion, and also reject D & H’s argument that the statutory drop shipment rule violates the dormant commerce clause of the United States Constitution.  Accordingly, we affirm the decision of the board. Statutory framework.  a.  Sales tax.  General Laws c. 64H distinguishes between retail sales transactions and sales-for-resale transactions.  Retail sales of goods and services are subject to tax in Massachusetts.  G. L. c. 64H, § 2.  […]


Posted by Massachusetts Legal Resources - August 1, 2017 at 2:18 am

Categories: News   Tags: , , , , , ,