The Massachusetts Commissioner of Revenue claimed the state was entitled to use taxes from a New Hampshire tire store, Town Fair Tire Centers, that sold merchandise to residents of Massachusetts without collecting the Massachusetts use tax. The Commissioner stated that the tax assessments were proper because Massachusetts customers intended to use the tires in Massachusetts. The Massachusetts Supreme Judicial Court found that there is no statutory presumption of use in Massachusetts where personal property is sold outside of the Commonwealth to a resident of Massachusetts, even where the goods purchased out of state may be affixed to property (an automobile) registered in Massachusetts. The Court specifically stated that it would be up to the Massachusetts legislature to create such a presumption of use.
For New Hampshire businesses who sell products to Massachusetts residents, this is an obvious win. However, with this decision, it is not known whether the Massachusetts legislature will create a statutory presumption of use. For now the Massachusetts Supreme Judicial Court has ruled that businesses like Town Fair Tire do not have the obligation to collect a use tax when Massachusetts residents shop at stores outside of Massachusetts.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at firstname.lastname@example.org.