| Date: | 04/12/2024 |
|---|---|
| Organization: | Massachusetts Department of Revenue |
| Regulatory Authority: | Massachusetts General Laws |
| Official Version: | Published by the Massachusetts Register |
830 CMR: DEPARTMENT OF REVENUE
830 CMR 64H.00: SALES AND USE TAX
830 CMR 64H.1.9: Remote Retailers and Marketplace Facilitators
(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. The regulation 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
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).
Commissioner. The Commissioner of Revenue or the Commissioner’s duly authorized representative.
In-state Marketplace Facilitator. A marketplace facilitator that is not a remote retailer.
In-state Vendor Contacts. Contacts, other than remote vendor contacts, that cause the vendor to be “engaged in business in the Commonwealth” within the meaning of M.G.L. c. 64H, § 1. Examples of in-state vendor contacts include the exploitation of the retail sales market within the commonwealth through the use of in-state stores, employees, inventory or representatives.
Marketplace. A physical or electronic forum, including a shop, store, booth, television or radio broadcast, internet website, catalogue or dedicated sales software application, where the tangible personal property or services of a marketplace seller are offered for sale, regardless of whether, in the case of tangible personal property, such property is physically located in the commonwealth.
Marketplace Facilitator. A person that contracts with a marketplace seller to facilitate sales of tangible personal property or services on behalf of the marketplace seller through a marketplace operated by such person if such person also, directly, or indirectly through one or more related persons, provides both:
(a) any of the following electronic commerce services:
1. transmitting or otherwise communicating the offer or acceptance between a buyer and the marketplace seller;
2. owning or operating the infrastructure, electronic or physical, or technology that brings buyers and sellers together;
3. providing a virtual currency that buyers are authorized or required to use to purchase tangible personal property or services from the marketplace seller; or
4. software development or research and development activities related to any of the logistical services described in 830 CMR 64H.1.9: Marketplace Facilitator(b) of this definition if such services are directly related to a physical or electronic marketplace operated by the person or a related person; and
(b) any of the following logistical services, as provided with respect to the marketplace seller’s tangible personal property or services; specifically:
1. payment processing services;
2. fulfillment or storage services;
3. listing tangible personal property or services for sale;
4. setting prices;
5. branding sales as those of the marketplace facilitator;
6. taking orders;
7. advertising or promotion; or
8. providing customer service or accepting or assisting with returns or exchanges.
A marketplace facilitator may also be a marketplace seller. In all cases a marketplace facilitator is a retailer.
Marketplace Seller. A person that makes retail sales through a marketplace operated by a marketplace facilitator. A marketplace seller may also be a marketplace facilitator.
Massachusetts Sales. All sales made by a vendor of tangible personal property or services delivered into the state, however consummated, including exempt sales.
Remote Marketplace Facilitator. A remote retailer that is a marketplace facilitator.
Remote Marketplace Seller. A remote retailer that is a marketplace seller. A remote marketplace seller may also be a remote marketplace facilitator.
Remote Retailer. A retailer, including a marketplace seller or marketplace facilitator, that is engaged in business in the commonwealth only through remote vendor contacts.
Remote Vendor Contacts. A vendor’s contacts exploiting the retail sales market within the commonwealth when such in-state contacts are limited to:
(a) catalogs or other solicitation materials sent through the mail or otherwise;
(b) billboards, advertisements or solicitations in newspapers, magazines or radio or television broadcasts;
(c) the utilization of computer networks or any other similar communications medium, including the utilization of Internet websites, software or cookies distributed or otherwise placed on customers’ computers or other communications devices, or a downloaded application; or
(d) the availment of the substantial privilege of carrying on business within the commonwealth through virtual or economic contacts.
Retailer. A retailer as defined in M.G.L. c. 64H, § 1.
Sales. Sales as defined in M.G.L. c. 64H, § 1, including sales that are facilitated by a marketplace facilitator, whether or not such sales qualify for a sales tax exemption.
Sales or Use Tax, or Tax. The sales tax imposed under M.G.L. c. 64H or the use tax imposed under M.G.L. c. 64I, including, as relevant, the local option sales tax imposed under M.G.L. c. 64L and the state excise and local tax option imposed under M.G.L. c. 64N.
Services. Services as defined in M.G.L. c. 64H, § 1, including telecommunications services, see 830 CMR 64H.1.6.
Tangible Personal Property. Tangible personal property as defined in M.G.L. c. 64H, § 1, including meals, see 830 CMR 64H.6.5 and standardized computer software, see 830 CMR 64H.1.3.
Vendor. A retailer or other person, including a remote retailer, selling tangible personal property or services, the gross receipts from the retail sale of which are required to be included in the measure of the sales or use tax.
(a) Remote Retailers, Including Remote Marketplace Facilitators. A remote retailer, including a remote marketplace seller or a remote marketplace facilitator, is required to register, collect and remit sales or use tax as a vendor with respect to its Massachusetts sales as follows:
October 1, 2019 through December 31, 2019. For the period beginning October 1, 2019 through December 31, 2019, as of October 1, 2019, if during the preceding 12 months, October 1, 2018 to September 30, 2019, it had in excess of $100,000 in Massachusetts sales;
Calendar Years Beginning with 2020 and Thereafter.
a. For each calendar year beginning with 2020 and thereafter, as of January 1st of that year, if during the preceding calendar year it had in excess of $100,000 in Massachusetts sales, provided, however, that if the remote retailer passed $100,000 in Massachusetts sales after November 1st of the prior year, the requirement is for the period beginning as of the first day of the first month beginning two months after the month in which the $100,000 threshold is exceeded; or
b. If 830 CMR 64H.1.9(3)(a)2.a. does not otherwise apply, for each calendar year beginning with 2020 and thereafter, as of the first day of the first month beginning two months after the month in which the remote retailer first exceeds $100,000 in Massachusetts sales for the calendar year.
Remote Retailer Becomes an In-state Retailer. If at any time the remote retailer becomes engaged in business in the state through in-state vendor contacts, for the tax period commencing as of that date, notwithstanding the provisions of 830 CMR 64H.1.9(3)(a)1. and 2.
(b) In-state Marketplace Facilitators. An in-state marketplace facilitator is required to register, collect and remit sales or use tax with respect to its Massachusetts sales made on its own behalf, regardless of the amount of such sales. In addition, an in-state marketplace facilitator is required to register, collect and remit sales or use tax with respect to the Massachusetts sales it facilitates on behalf of marketplace sellers as follows:
October 1, 2019 through December 31, 2019. For the period beginning October 1, 2019 through December 31, 2019, as of October 1, 2019, if during the preceding 12 months, October 1, 2018 to September 30, 2019, it had in excess of $100,000 in Massachusetts sales;
Calendar Years Beginning with 2020 and Thereafter.
a. For each calendar year beginning with 2020 and thereafter, as of January 1 of that year, if during the preceding calendar year it had in excess of $100,000 in Massachusetts sales, provided, however, that if the remote retailer passed $100,000 in Massachusetts sales after November 1 of the prior year, the requirement is for the period beginning as of the first day of the first month beginning two months after the month in which the $100,000 threshold is exceeded; or
b. If 830 CMR 64H.1.9(3)(b)2.a. does not otherwise apply, for each calendar year beginning with 2020 and thereafter, as of the first day of the first month beginning two months after the month in which the remote retailer first exceeds $100,000 in Massachusetts sales for the calendar year.
(c) Massachusetts Sales of Marketplace Facilitators and Remote Retailers. For purposes of the rules set forth in 830 CMR 64H.1.9(3)(a) and (b), marketplace facilitators and remote retailers compute their Massachusetts sales in the following manner. The Massachusetts sales of a marketplace facilitator, whether the facilitator is remote or in-state, include both the facilitator’s sales made on its own behalf and all sales that the facilitator facilitates on behalf of marketplace sellers irrespective of whether such marketplace sellers are otherwise subject to the sales or use tax collection duty. See 830 CMR 64H.1.9(6). The Massachusetts sales of a remote marketplace seller do not include sales made on behalf of such seller by a marketplace facilitator when the facilitator registers, collects and remits tax with respect to these sales. In the case of a remote retailer, including both a remote marketplace seller and a remote marketplace facilitator, Massachusetts sales include sales made by the remote retailer and any related remote retailer.
(d) No Application Where Sales for Resale. The marketplace facilitator rules do not apply to a person who is solely engaged in purchasing products for resale. Also, the marketplace facilitator rules do not apply to the extent that a person that is a marketplace facilitator is engaged in purchasing products for resale. Where a person, including a marketplace facilitator, buys products for resale and provides a resale certificate to its supplier, that person then becomes the seller of those goods who is the entity responsible for compliance with sales and use tax requirements with respect to its subsequent resales.
(e) Examples. The following examples illustrate the provisions of this section. Assume for purposes of these examples that in the case of a remote retailer there are no sales made by a related remote retailer (i.e., that would need to be attributed to the remote retailer). Also, assume, unless the context suggests otherwise, that none of the retailers referenced were previously subject to a Massachusetts sales or use tax collection duty.
Example 1. A remote retailer, Company A, sells tangible personal property into the state. Company A’s Massachusetts sales for the period October 1, 2018 to September 30, 2019 were $80,000, all of which were in calendar year 2019. In October of 2019, Company A reached $100,000 in Massachusetts sales for calendar year 2019. Company A is required to register, collect and remit tax beginning as of January 1, 2020.
Example 2. A remote retailer, Company B, sells tangible personal property into the state. Company B’s Massachusetts sales for the period October 1, 2018 to September 30, 2019 were $60,000 and its Massachusetts sales for the period January 1, 2019 through December 31, 2019 were $90,000. During calendar year 2020, Company B reaches $100,000 in Massachusetts sales on May 15. Company B is required to register, collect and remit tax beginning as of August 1, 2020.
Example 3. A remote marketplace facilitator, Company C, facilitates the sale of tangible personal property on behalf of numerous marketplace sellers, some of which are remote marketplace sellers and some of which are engaged in doing business in Massachusetts through in-state contacts (and therefore are not remote marketplace sellers). Company C is also itself a remote retailer that sells taxable tangible personal property on its own behalf. Company C’s Massachusetts sales for the period October 1, 2018 through September 30, 2019, including the sales that it makes on behalf of its marketplace sellers and on its own behalf, total $110,000. Therefore, Company C is required to register, collect and remit tax beginning as of October 1, 2019 with respect to all of the Massachusetts sales that it either makes on its own behalf or facilitates on behalf of its marketplace sellers. Assuming Company C registers, collects and remits tax for the period beginning as of October 1, 2019, none of the marketplace sellers that sell through Company C are required to register, collect or remit tax with respect to such sales that are facilitated by Company C on their behalf. Moreover, for purposes of computing their Massachusetts sales for the period October 1, 2019 through December 31, 2019, each of the remote marketplace sellers that sell through Company C should exclude their sales as facilitated by Company C from their Massachusetts sales calculation for purposes of 830 CMR 64H.1.9(3)(a).
Example 4. Same facts as Example 3. Assume that one marketplace seller for which Company C facilitates Massachusetts sales is Company D. Company D only uses one marketplace facilitator, Company C, and otherwise directly makes sales into Massachusetts through its own remote vendor contacts. Company C facilitates $30,000 in Massachusetts sales for Company D for the period October 1, 2019 through December 31, 2019. Assume Company D’s Massachusetts sales for the period October 1, 2018 through September 30, 2019 were $60,000 and its Massachusetts sales for the period January 1, 2019 through December 31, 2019 were $120,000, but that, as mentioned, $30,000 of those latter sales were sales facilitated by Company C. Because Company C begins to collect and remit tax on behalf of Company D as of October 1, 2019, Company D is not required to register, collect and remit tax with respect to these facilitated sales post-October 1st. Further, Company D is not required to register, collect or remit tax with respect to its own direct Massachusetts sales for the period October 1, 2019 through December 31, 2019 or for the tax period January 1, 2020 through December 31, 2020 (although it may need to register, collect and remit with respect to its direct Massachusetts sales at some point during 2020 depending upon its volume of 2020 direct Massachusetts sales).
Example 5. Same facts as Example 3. Assume that one marketplace seller for which Company C facilitates sales is Company E. Company E uses only one marketplace facilitator, Company C, and otherwise directly makes sales into Massachusetts through its own remote vendor contacts. Company C facilitates $30,000 in Massachusetts sales for Company E for the period October 1, 2019 through December 31, 2019. Assume Company E’s sales for the period October 1, 2018 through September 30, 2019 were $80,000 and its Massachusetts sales for the period January 1, 2019 through December 31, 2019 were $150,000, but that, as mentioned, $30,000 of those latter sales were sales facilitated by Company C. Because Company C begins to collect and remit tax on behalf of Company E as of October 1, 2019, Company E is not required to register, collect and remit tax with respect to these facilitated sales beginning as of October 1st. However, Company E is required to register, collect and remit tax for the tax period January 1, 2020 through December 31, 2020 because Company E’s direct Massachusetts sales for the period January 1, 2019 through December 31, 2019, after the subtraction of the $30,000 in sales that were facilitated by Company C, were $120,000.
Example 6. An in-state marketplace facilitator, Company F, facilitates the sale of tangible personal property on behalf of numerous marketplace sellers, some of which are remote marketplace sellers and some of which are engaged in doing business in Massachusetts through in-state contacts (and therefore are not remote marketplace sellers). Company F is also itself a retailer that sells taxable tangible personal property on its own behalf. Company F’s Massachusetts sales for the period October 1, 2018 through September 30, 2019, including the sales that it makes on behalf of its marketplace sellers and on its own behalf, total $60,000 and its Massachusetts sales for the period January 1, 2019 through December 31, 2019, including the sales that it makes on behalf of its marketplace sellers and on its own behalf, total $90,000. For the tax period beginning October 1, 2018 through December 31, 2019, Company F is required to collect and remit tax only with respect to the Massachusetts sales that it makes on its own behalf. Further, Company F is not required to collect or remit tax on behalf of the marketplace sellers for which it facilitates sales for the tax period beginning January 1, 2020 . The in-state marketplace sellers for which Company F facilitates sales must themselves collect and remit tax on all of their Massachusetts sales, including those facilitated by Company F, for these periods. The remote marketplace sellers for which Company F facilitates sales may have to collect and remit tax on all of their Massachusetts sales, including those facilitated by Company F, for these periods, if they meet the thresholds stated in 830 CMR 64H.1.9(3)(a)1. and/or 2.
Example 7. Same facts as Example 6, except that during 2020, Company F reaches $100,000 in Massachusetts sales on May 15th. For the tax period January 1, 2020 through July 31, 2020, Company F is required to collect and remit tax only with respect to the Massachusetts sales that it makes on its own behalf. However, beginning as of August 1, 2020 Company F is required to collect and remit tax with respect to the Massachusetts sales that it facilitates on behalf of its marketplace sellers. Assuming Company F does collect and remit tax on behalf of its marketplace sellers beginning as of August 1, 2020, none of the marketplace sellers for which it facilitates sales are required to collect or remit tax with respect to such sales. Some of the marketplace sellers for which Company F facilitates sales are engaged in doing business in Massachusetts through in-state contacts. Prior to August 1, 2020, these in-state marketplace sellers are required to collect and remit tax on all of their Massachusetts sales, including those facilitated by Company F. Starting as of August 1, 2020, these marketplace sellers must continue to collect and remit tax with respect to Massachusetts sales that are not made through Company F. Some of the marketplace sellers for which Company F facilitates sales are remote marketplace sellers. Prior to August 1, 2020, these remote marketplace sellers may have to collect and remit tax on all of their Massachusetts sales, including those facilitated by Company F, if they meet the thresholds stated in 830 CMR 64H.1.9(3)(a)1. and/or 2. Starting as of August 1, 2020, these marketplace sellers may exclude the Massachusetts sales facilitated on their behalf by Company F from their Massachusetts sales calculation for purposes of 830 CMR 64H.1.9(3)(a).
(a) A marketplace facilitator does not include the following persons:
a. the transmission or communication of the offer and acceptance between third-party buyers and the marketplace sellers;
b. processing or collecting payments from such buyers and transmitting the payment to the marketplace sellers; or
c. entering into agreements or arrangements with third party commercial entities to perform such collection and transmission.
(b) The Commissioner may, from time to time, issue further guidance to limit the application of the term marketplace facilitator to certain types of businesses on a case by case basis. A marketplace facilitator or marketplace seller may also seek a waiver from the rules as they would otherwise apply. See 830 CMR 64H.1.9(6).
(a) Rights and Responsibilities. When a marketplace facilitator is required to collect and remit tax with respect to the sales that it facilitates on behalf of a marketplace seller, it is considered a vendor for all purposes with respect to these sales. Therefore, for example, such marketplace facilitator must retain the sales and use tax records and other information as required by state law, see 830 CMR 62C.25.1: Record Retention, may accept resale and exempt use certificates with respect to its facilitated sales, and is entitled to seek reimbursement in connection with purchaser refund requests and bad debts.
(b) Marketplace Facilitator’s Collection Certification.
(a) General Rule. The Commissioner may, in his discretion, issue a waiver to:
1. a marketplace facilitator relieving it of the requirement that it register, collect and remit sales or use tax with respect to some or all of the sales that it facilitates on behalf of marketplace sellers; or
2. a marketplace seller that sells taxable telecommunications services allowing it to collect and directly remit sales or use tax with respect to such services.
(b) Marketplace Facilitator Waiver.
1. A marketplace facilitator may request a waiver from the requirement that it register and remit tax with respect to sales that it facilitates on behalf of one or more of its marketplace sellers. To request such waiver the marketplace facilitator must submit an application that identifies the sellers for which it seeks such waiver and substantiate that, with respect to the sales for which the facilitator requests the waiver, the applicable taxes will be remitted by such sellers. The waiver request will be approved only if the marketplace sellers for whom the sales will be facilitated are:
a. registered to collect sales or use tax;
b. subject to the sales or use tax collection duty; and
c. current in their tax reporting with respect to sales or use tax and all other state taxes. Each of the marketplace sellers for whom the waiver is requested must also agree to and sign the waiver application. A marketplace facilitator that seeks a waiver must agree to:
i. collect the applicable tax registration numbers of all marketplace sellers for which it facilitates sales;
ii. retain such registration numbers in its books and records; and
iii. allow the Commissioner to examine such books and records upon request.
The Commissioner may revoke a waiver if he determines that the marketplace seller is not remitting the required tax on sales to which the waiver relates.
2. When a waiver is granted to a marketplace facilitator, the sales or use tax with respect to the sales covered by the waiver shall be:
a. collected by the marketplace facilitator on behalf of the marketplace seller;
b. provided to the marketplace seller; and
c. remitted by the marketplace seller. In these cases:
i. the marketplace facilitator will not be required to remit the tax;
ii. the marketplace facilitator will be relieved of liability for the non-remittance of tax; and
iii. it is the marketplace seller that will be subject to audit in connection with the taxable sales. However, the facilitated sales shall count for purposes of the marketplace facilitator’s Massachusetts sales calculation as set forth in either 830 CMR 64H.1.9(3)(a) or (b).
(c) Marketplace Seller Waiver.
1. A marketplace seller that sells taxable telecommunications services may request a waiver allowing it to collect and directly remit sales or use tax with respect to such services as sold on a marketplace where such collection and remittance would be otherwise due from the marketplace facilitator. To request such waiver the marketplace seller must be:
a. registered to collect sales or use tax;
b. subject to the sales or use tax collection duty; and
c. current in its tax reporting with respect to sales or use tax and all other state taxes.
Further the application of the marketplace seller must explain why it and not the marketplace facilitator should be required to collect the tax. The waiver application must also indicate that the marketplace facilitator was given appropriate notice of the waiver request. Although the formal approval of the marketplace facilitator is not required, it is expected that the marketplace seller will work with the marketplace facilitator with respect to the practical application of the waiver. The Commissioner may revoke a waiver if he determines that the marketplace seller is not collecting and remitting the required tax on sales to which the waiver relates.
2. When a waiver is granted to a marketplace seller, the sales or use tax with respect to the sales covered by the waiver shall be either collected directly by the marketplace seller and remitted by the marketplace seller or collected by the marketplace facilitator and transferred to the marketplace seller for remittance, depending upon the agreement between the parties. If the marketplace seller is to collect and remit the tax:
a. the marketplace facilitator shall not be required to collect and remit the tax;
b. the marketplace facilitator is relieved of liability for the collection and remittance of tax; and
c. the marketplace seller shall be subject to audit in connection with the sales. If the marketplace facilitator is to collect the tax:
i. the marketplace facilitator shall not be required to remit the tax;
ii. the marketplace facilitator is relieved of liability for the remittance of tax; and
iii. it is the marketplace seller that shall be subject to audit in connection with the sales. In either instance, the facilitated sales shall count for purposes of the marketplace facilitator’s Massachusetts sales calculation as set forth in either 830 CMR 64H.1.9(3)(a) or (b).
(d) Approval Process. In determining whether to approve a marketplace facilitator or marketplace seller waiver application the Commissioner will consider whether the application meets the requirements set forth in 830 CMR 64H.1.9(6)(b)1. and 830 CMR 64H.1.9(6)(c)1. Further the Commissioner will consider, inter alia, whether, with respect to the marketplace seller that would be ultimately required to remit the tax:
1. its tax filing history, including with respect to all taxes due from such marketplace seller and related persons;
2. its internal controls with respect to tax reporting and making tax payments;
3. the volume of its gross receipts and other financial resources; and
4. whether it is publicly traded or is controlled, directly or indirectly, by a publicly traded company.
(a) Vendor Registration. A vendor subject to the registration requirement of 830 CMR 64H.1.9(3) must register to collect and remit tax on MassTaxConnect.
(b) Requirement to File Tax Return. A vendor subject to the collection and remittance requirements of 830 CMR 64H.1.9(3) must file a tax return in the form prescribed by the Commissioner and pay the tax due for each calendar month on or before the 20th day of the following calendar month. The tax return must be filed electronically through MassTaxConnect.
For tax periods ending on or after April 1, 2021, a vendor subject to the collection and remittance requirements of 830 CMR 64H.1.9(3) must file a tax return in the form prescribed by the Commissioner and pay the tax due for each calendar month on or before the 30th day of the following calendar month. A vendor may also be subject to the advance payment rules in 830 CMR 62C.16B.1. The tax return must be filed electronically through MassTaxConnect.
(c) Payment of Tax. A vendor must timely pay sales or use tax in the format and manner as specified by the Commissioner.
(d) Interest. Any portion of tax that is not paid on or before the due date of a return will have added to it interest from the due date of the return to the date the tax is paid at a rate prescribed by M.G.L. c. 62C, § 32.
(e) Penalties. A vendor may be subject to penalties under M.G.L. c. 62C if it fails to:
1. timely file a return,
2. pay the required tax or
3. file a return and/or pay the required tax in the format required by the Commissioner. See 830 CMR 62C.33.1: Interest, Penalties, and Application of Payments. The Commissioner, however, may waive or abate each of these penalties if a taxpayer demonstrates that the failure to file or pay resulted from reasonable cause and not willful neglect. See id.
(a) A marketplace facilitator shall be relieved from liability, including penalties, for the incorrect collection or remittance of sales or use tax on transactions it facilitates or for which it is the seller if the error is due to an exemption certificate taken in good faith. Also a marketplace facilitator shall be relieved from liability, including interest and penalties, for the incorrect collection or remittance of sales and use tax on transactions it facilitates or for which it is the seller if the error is due to reasonable reliance on:
1. incorrect written guidance provided by the commonwealth; or
2. incorrect written information provided by the marketplace seller or purchaser regarding the tax classification or proper sourcing of an item or transaction.
(b) For purposes of 830 CMR 64H.1.9(8)(a)1. and 2., reasonable reliance means that the marketplace facilitator acted with reasonable cause and in good faith and did not know or have reason to know that the written guidance or information was incorrect. The relief provisions of 830 CMR 64H.1.9(8)(a)1. and 2. apply only if the marketplace facilitator can show that its failure to remit the correct amount of tax was due to the incorrect written guidance or information.
(c) The relief provisions of 830 CMR 64H.1.9(8)(a)1. and 2. do not apply to direct sales made by an in-state marketplace facilitator.
(d) For the relief provision set forth in 830 CMR 64H.1.9(8)(a)2. to apply the marketplace facilitator must demonstrate that it made a reasonable effort under the circumstances to obtain sufficiently detailed information from the marketplace seller or purchaser, which effort should consider the level of sophistication of such seller or purchaser. Further, the relief provision set forth at 830 CMR 64H.1.9(8)(a)2. does not apply to information provided by either a marketplace seller or purchaser when the marketplace facilitator and such seller or purchaser are related persons. The relief provision set forth at 830 CMR 64H.1.9(8)(a)2. also does not apply when there are contractual provisions entered into between the marketplace facilitator and such seller or purchaser that provide that the liability for such errors is assigned to the seller or purchaser. In any instance in which the marketplace facilitator is relieved from liability under 830 CMR 64H.1.9(8)(a)2. because it received incorrect written information from a marketplace seller the marketplace seller shall instead be responsible for the tax, including any interest and penalties, assuming that the marketplace seller is otherwise subject to tax.
Nothing in 830 CMR 64H.1.9 shall be construed to limit or negate the Commissioner’s authority to make adjustments as otherwise permitted under Massachusetts law. Further, in the event that a vendor within the meaning of this regulation fails to collect the required sales or use tax with respect to a particular transaction, nothing in 830 CMR 64H.1.9, shall limit the purchaser’s use tax liability in connection with such transaction.
Nothing in 830 CMR 64H.1.9 shall affect tax liability that accrued prior to its effective date, including:
(a) on the part of a marketplace seller that previously had in-state vendors contacts because it owned inventory in a Massachusetts warehouse as maintained by a marketplace facilitator, or
(b) pursuant to 830 CMR 64H.1.7.
Regulatory Authority
830 CMR 64H.1.9: M.G.L. c. 62C, § 3; M.G.L. c 64H, § 1; M.G.L. c. 64I, § 1.
Date of Promulgation: December 13, 2019
Amendment Promulgated 4/12/2024 - Sections (4)(a)(b) and (7)
