Since the 2018 Wayfair Supreme Court ruling, the State of Massachusetts sales tax receipts from online purchases have failed to meet earlier predictions. A November 2017 report by the US Government Accountability Office revealed that the state would generate $279 million in additional revenue. With actual Massachusetts sales tax receipts from online transactions totaling $60 million, leaders are scratching their heads about what has gone wrong.
Although many states anticipated higher sales tax revenues following the favorable outcome in the Wayfair ruling, Massachusetts was one state that did not take all aspects of the ruling into consideration. The main reason why Massachusetts sales tax receipts did not increase following the ruling is primarily due minimal impact on online retailers. Companies with national stature such as Amazon, are far more likely to generate more in sales tax revenue which is driven by their high volume of online sales. However, Amazon has been collecting Massachusetts state sales tax dating back to 2013. Jared Walczak, senior policy analyst at Tax Foundation stated that “…government officials didn’t have a good grasp of just how much they were already collecting in online sales taxes.”