Monika Miles - Economic Nexus Versus Cookie Nexus

Although the precedent for economic nexus was set in June 2018, states were attempting to come up with ways to collect and remit sales tax from online transactions long before the Wayfair case made it to the courts.

Massachusetts and Ohio, for example, decided to define the computer code from internet cookies as a tangible item that could establish a physical presence nexus. However, once Wayfair passed, was this “cookie nexus” still in effect? The answer is, “Yes.” However, as always, regulations are still more complicated and confusing.

Massachusetts’ Cookie And Economic Nexus Rules

As Avalara explains:

  • Massachusetts’ economic nexus provisions require remote sellers to collect and remit state sales tax if the sales are greater than $100,000 in the current or previous calendar year. However, if you make sales of less than $100,000 into the state, you fall under a small seller exception and don’t need to worry about sales tax.
  • The cookie nexus required companies with more than $500,000 in internet sales and more than 100 transactions to collect and remit sales tax, if the company placed “cookie” onto the computers of MA customers. If your business falls under these thresholds, the provisions don’t apply to you.

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