Posts tagged "Catalog"

American Catalog Mailers Association, et al. v. Heffernan (Lawyers Weekly No. 09-003-17)

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 2017-1772 BLS1 AMERICAN CATALOG MAILERS ASSOCIATION and NETCHOICE vs. MICHAEL J. HEFFERNAN, in his capacity as Commissioner of the MASSACHUSETTS DEPARTMENT OF REVENUE MEMORANDUM OF DECISION AND ORDER ENTERING DECLARATORY JUDGMENT ON COUNT I OF PLAINTIFFS’ VERIFIED COMPLAINT In this case, the plaintiff trade associations1 challenge the validity of Directive 17-1 issued by the Commissioner of the Massachusetts Department of Revenue (the Commissioner and the DOR, respectively) on April 3, 2017 (the Directive). The Directive is entitled: “Requirement that Out-of-State Internet Vendors with Significant Massachusetts Sales Must Collect Sales or Use Tax.” In effect, it requires that, beginning on July 1, 2017, large internet vendors who do not have places of business in Massachusetts, but have made a minimum number of product sales for delivery into Massachusetts, collect and remit to the DOR Massachusetts sales or use taxes. This is a new policy, as these internet vendors were not previously required to collect sales or use taxes from their online customers who place orders for goods to be delivered in Massachusetts. The plaintiffs’ verified complaint (the complaint) is pled in four counts: Count One asserts that the Directive was issued in violation of the 1 Plaintiff American Catalog Mailers Association is a trade association representing companies engaged in catalog marketing. Plaintiff NetChoice is a trade association of internet companies engaged in online sales. 2 Massachusetts Administrative Procedure Act (G.L. c. 30A, the APA); Count Two asserts that the Directive is preempted by the federal Internet Tax Freedom Act (47 U.S.C. § 151, the IFTA); Count Three asserts that the Directive violates the Commerce Clause of the United States Constitution; and Count Four asserts that the Directive violates the Due Process Clause of the United States Constitution. The case came before the court on June 27, 2017, three days before the Directive was to take effect, on the plaintiffs’ motion for a preliminary injunction enjoining the Commissioner from enforcing the Directive. In their moving papers, the plaintiffs relied on Counts One and Two in pressing their request for preliminary injunctive relief. At the hearing, both the plaintiffs and the Commissioner agreed that as to Count One, which alleges that the Directive was invalid because not promulgated as a regulation pursuant to the APA, there were no facts in dispute, the issue had been fully briefed, and that Count could be resolved as a matter of law on the materials submitted. In consideration of the parties’ memoranda and oral arguments, the court finds that the Directive established a new policy that substantially altered the rights and interests of the regulated parties and therefore had to be promulgated pursuant to sections 2 […]

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Posted by Massachusetts Legal Resources - September 29, 2017 at 3:06 am

Categories: News   Tags: , , , , , , ,

American Catalog Mailers Association, et al. v. Heffernan (Lawyers Weekly No. 09-004-17)

1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT CIVIL ACTION NO. 2017-1772 BLS1 AMERICAN CATALOG MAILERS ASSOCIATION and NETCHOICE vs. MICHAEL J. HEFFERNAN, in his capacity as Commissioner of the MASSACHUSETTS DEPARTMENT OF REVENUE ORDER ON DEFENDANT’S EMERGENCY MOTION TO VACATE MEMORANDUM OF DECISION AND ORDER ENTERING DECLARATORY JUDGMENT ON COUNT I AND REVISED ORDER FOR THE ENTRY OF FINAL JUDGMENT On June 28, 2017, this Court issued a Memorandum of Decision and Order Entering Declaratory Judgment on Count I of Plaintiff’s Verified Complaint (the Decision). The Decision concluded with the following Order: For the foregoing reasons, Final Judgment shall enter (a) as to Count One of the Complaint, declaring that the Directive is a regulation promulgated without compliance with Sections 2 or 3 of G.L. Chapter 30A and, therefore, invalid; and (b) as to Counts Two through Four dismissing these counts without prejudice. Apparently also on June 28, 2017, the defendant (DOR) revoked the Directive and filed with the court pleadings entitled: “Defendant’s Notice of Immediate Revocation of Department of Revenue Directive 17-1” and “Defendant’s Notice of Objection to Entry of Final Declaratory Judgment on Count I.” The Decision was, however, completed and signed by the Court well before it received these two pleadings. Thereafter, the DOR filed the pending motion in which it asks the court to vacate the Decision. 2 The court denies the motion to the extent that it requests that the Decision be vacated. Count I of the complaint presented a pure issue of law. The parties submitted what appeared to be comprehensive briefs addressing it. There was a lengthy oral argument on the issue on June 27, 2017. The Directive was to go into effect on July 1, 2017. During argument, the DOR rejected the court’s suggestion that it voluntarily delay the date by which internet retailers would have to be in compliance with the Directive. During argument, the court made quite clear its intention to enter a final judgment on Count One (and dismiss the other counts), if it concluded that the Directive was a regulation, as it was undisputed that it had not been promulgated following the procedures required by the Administrative Procedures Act. The DOR expressed no objection to this approach until the following day. By then, the Court had completed and signed the Decision while the matters raised by Count One were still actively in dispute between the parties to this litigation. However, before the separate Final Judgment required by Mass.R.Civ.P. 58 (a) could issue, the court learned that the Directive had been revoked “effective immediately.” It is the court’s understanding that, thereafter, the DOR began the process of promulgating the Directive as a regulation in accordance with the APA. […]

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Posted by Massachusetts Legal Resources - September 28, 2017 at 11:32 pm

Categories: News   Tags: , , , , , , ,