Legislature Approves $43B budget, Includes RAM Supported “Marketplace” Sales Tax Provisions

On July 22nd, the Legislature adopted a compromise FY20 state budget deal and sent the final $43.1 billion spending plan to Governor Baker for his consideration. Currently, the Governor is reviewing the proposal, with ten days to review and sign the bill into law, while also sending back any amendments or vetoes of items of disapproval.

The final plan includes important provisions requested by RAM relative to the extension of sales tax collection responsibility to marketplace facilitators, similar to the legislation RAM had drafted and filed earlier this session. This important step to update the Commonwealth’s sales tax collection laws is in line with similar actions being taken across the country in the wake of the Wayfair decision, and will bring us closer to true marketplace and sales tax fairness between all sellers. The budget language also sets in law a new sales threshold of $100,000 in sales into MA at which remote sellers are required to collect and remit, again modeled after Wayfair. The $100,000 sales threshold will replace the current threshold set by the Department of Revenue (DOR) in its “cookie tax” regulation of October 2017.

The final budget does not include the Governor’s earlier proposal to require a preliminary sales tax remittance or prepayment from certain sellers, as was previously rejected by both the House and Senate. The budget also does not include any references to past “Real Time” sales tax collection proposals.

The Conference Committee also chose not to adopt the Senate proposed language relative to establishing a 75% excise tax on electronic nicotine delivery systems, which was opposed by RAM.