IT’S A LAWSUIT: NetChoice, one of the more active groups in opposing giving states broader powers to tax out-of-state online retailers, filed suit Friday to stop a new rule that would do just that in Massachusetts, as your Morning Tax author noted. The Massachusetts regulation seeks to pass the physical presence test currently required by the Supreme Court’s 1992 Quill ruling by maintaining that smartphone apps or web browser cookies are a physical presence. That’s laughable, NetChoice argues, in addition to running afoul of the Internet Tax Freedom Act.
Couple other things to note here: Other states that have pushed the envelope on online sales tax collection, notably Alabama and South Dakota, have basically agreed that their laws run counter to the current Supreme Court precedent — in order to hopefully allow the high court to reexamine that current precedent more quickly. Massachusetts didn’t do that, according to Steve DelBianco, NetChoice’s executive director. On top of that, retail advocates were pretty loud cheerleaders for the Alabama and South Dakota laws, but have been noticeably quiet on this Massachusetts directive.