Sears, Roebuck & Co., et al. v. Commissioner of Revenue (Lawyers Weekly No. 11-078-13)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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; SJCReporter@sjc.state.ma.us 12‑P‑547 Appeals Court SEARS, ROEBUCK & CO. & another[1] vs. COMMISSIONER OF REVENUE. No. 12‑P‑547. Suffolk. January 17, 2013. ‑ June 19, 2013. Present: Cypher, Katzmann, & Rubin, JJ. Taxation, Sales tax. Debt. Appeal from a decision of the Appellate Tax Board. Michael J. Bowen for Sears, Roebuck & Co. Amy Spector, Assistant Attorney General, for Commissioner of Revenue. CYPHER, J. The plaintiff, Sears Roebuck & Co. (Sears), appeals from a decision of the Appellate Tax Board (board) denying its claims for reimbursement of sales taxes it remitted to the Commonwealth from purchases of its products by customers using a private label credit card issued by Citibank, N.A. (Citibank), and who later defaulted on their accounts with the bank. Facts. We summarize the background from the board’s findings based on the parties’ joint stipulation and their agreed statement of facts. Sears provided its customers the option of purchasing its products on credit with a private label credit card issued by Citibank. As a vendor registered with the Commissioner of Revenue (commissioner), Sears was required to collect and remit sales tax on tangible personal property to the Department of Revenue (department). G. L. c. 64H, § 2, as in effect prior to St. 2009, c. 27, § 53. Under its agreement with Sears, Citibank extended credit to the purchasers, and paid Sears the full retail price of the purchases, including the applicable sales tax. Obligated to remit the sales tax after the sale is completed, G. L. c. 64H, § 1, Sears subsequently remitted the sales tax for each sale to the department with its sales tax returns. When some of the purchasers defaulted on their accounts, Citibank wrote off those accounts after determining they were worthless. While Sears was unaffected by those losses, it nevertheless decided to seek reimbursement of the sales tax it had remitted to the department, pursuant to G. L. c. 64H, § 33, as in effect prior to St. 2008, c. 182, § 42, the so-called “bad debt statute.” Household Retail Servs., Inc. v. Commissioner of Rev., 448 Mass. 226, 227 (2007) (Household). Sears’s claims, filed with the commissioner in December, 2007, were denied. Sears then appealed the commissioner’s refusal to abate or refund the sales tax to the board pursuant to G. L. c. 62C, § 39. After a hearing, the board granted the commissioner’s motion […]