Massachusetts Governor Charlie Baker May Propose Unconstitutional Sales Tax Collection Responsibility on Remote Sellers

BOSTON – January 27, 2017. In an attempt to balance his $40.5 billion budget, Governor Charlie Baker may propose that remote sellers be required to collect Massachusetts sales taxes on sales of tangible personal property made over the internet to Massachusetts residents. A so-called “remote seller” is a seller that does not have a physical presence in Massachusetts.

The Governor’s proposal was reported by Shira Schoenberg, a Massachusetts State House reporter for The Republican.[1]  In her article updated to January 26, 2016 at 1:32 P.M., Schoenberg writes:

One major tax change would gain the state an additional $30 million by requiring certain online retailers who do business in Massachusetts to collect sales taxes.

Currently, some retailers that sell online – such as Amazon and Wal-Mart – have a physical presence in Massachusetts and collect sales taxes. But other online retailers do not have offices or stores in Massachusetts. Consumers technically must still pay the sales tax on anything they buy, but most do not.

The new rule, which Baker can implement without legislative approval, would require that as of July 1, any company doing more than $500,000 in annual sales in Massachusetts would have to collect and pay sales taxes to the state.

Governor Baker’s office declined to comment yesterday on this proposal following requests for clarification from our firm, M. Robinson Tax Law. Based solely on Ms. Schoenberg’s article, we have the following observations:

(1)   The collection of sales taxes from remote sellers without a physical presence in Massachusetts violates the United States Constitution as it is presently interpreted by the United States Supreme Court.[2]

(2)   Internet sales of tangible personal property by remote sellers are also protected from income taxation under the Interstate Income Act of 1959.[3]

(3)   Finally, the numbers don’t seem to add up. Governor Baker proposal assumes untaxed internet sales of about $500 million. But there might not be $500 million in untaxed internet sales. Amazon and most other large internet sellers already collect Massachusetts sales taxes on the sale of tangible personal property to Massachusetts residents. So which remote sellers are selling $500 million of tangible personal property to Massachusetts residents without collecting the Massachusetts sales tax?[4]

Governor Charlie Baker will have to find some other place to raise an additional $30 million in taxes to balance his $40.5 billion FY18 budget.


[1] (last visited

January 27, 2017 at 5:42 A.M.)
[2] Quill v. North Dakota, 504 U.S. 298 (1992)
[3] Public Law 86-272.
[4] We acknowledge Attorney George Isaacson for observing that the majority of e-commerce retail sales are carried out by Amazon and “big box” retailers that already collect and pay Massachusetts sales tax.  Mr. Isaacson spoke at the Boston Bar Association on January 26, 2017.

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