Monday, 5 June 2017

In Massachusetts, retailers’ cookies will soon lead to sales tax

A cookie is a kind of property in a location.

That statement, if maintained, could usher in a sea change in how online retailers tax users.

On July 1, the state of Massachusetts will begin enforcing a new directive from its Department of Revenue. It says online retailers must charge the state’s sales tax to customers in the state, if the retailers deposit or utilize a cookie — or a mobile app — on its customers’ machines.

Cookies, of course, are small text files that act as markers, letting a retailer know, for instance, that you looked at blue pants the last time you were on the site so it can personalize content the next time — even if you don’t log in.

Generally speaking, online retailers have not had to charge sales tax to their out-of-state customers, a pricing advantage compared to physical retailers in the 45 states that have sales tax. Federal rules say that retailers only have to charge sales tax if they have a physical presence in the state, such as a brick-and-mortar branch or a warehouse.

[Read the full article on MarTech Today.]


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Author: Barry Levine

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