Will Massachusetts Speed Up Sales Tax Remittance?

The pandemic has spurred on a number of sales tax changes over the last 10 months, many of them in regards to economic nexus or other Wayfair-related legislation. However, in Massachusetts, lawmakers are looking at sales tax remittance instead. More specifically, speeding up the remittance process.

This doesn’t come as a huge surprise as Massachusetts Governor Charlie Baker has introduced a number of similar plans since taking office in 2015, but this is the first one that may be approved.

What Is The Current Sales Tax Remittance Process?

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AARON GILES- Massachusetts Sales Tax

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.”

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