D & H Distributing Co. v. Commissioner of Revenue

The Supreme Judicial Court affirmed the decision of the Appellate Tax Board, which concluded that, under a provision of the Massachusetts sales tax statute known as the “drop shipment rule,” Taxpayer was responsible for collective and remitting sales tax due on products it sold to out-of-state retailers and then delivered to consumers. Taxpayer sold goods to retailers at wholesale and delivered the goods to Massachusetts consumers and others on behalf of those retailers. The Supreme Judicial Court held (1) the Commissioner of Revenue and the Board did not err in determining that Taxpayer was responsible as the vendor for collecting and remitting the sales tax due on products it sold to the out-of-state retailers and then delivered to consumers where it failed to meet its burden of proving that the retailers were engaged in business in Massachusetts; and (2) the statutory drop shipment rule does not violate the dormant commerce clause of the federal Constitution. View "D & H Distributing Co. v. Commissioner of Revenue" on Justia Law