The Impact of Massachusetts Court Cases on State and Local Tax Policies with Richard Jones
In this episode of the SALTovation podcast, we speak with Richard Jones, an attorney at Sullivan & Worcester in Boston, specializing in state and local tax for over two decades. Richard dives into two significant Massachusetts court cases: Oracle USA Inc. and US Auto Holdings. In the Oracle case, the Massachusetts Supreme Judicial Court upheld the ability to apportion sales tax for software sales and clarified the parameters of the Commissioner of Revenue's authority. In the US Auto Holdings case, the court struck down the concept of "cookie nexus" and denied the state's ability to retroactively apply the Wayfair decision. Listen this week as Richard provides insights into the implications of these cases and their potential impact on other states.
Topics discussed in this episode:
- State and local tax issues often involve unsettled and controversial areas, making them interesting and challenging for attorneys.
- Apportioning sales tax for software sales is a reasonable approach and should be considered in other states.
- The concept of "cookie nexus" is not valid, as physical presence requires something tangible.
- The Massachusetts Supreme Judicial Court's decision in US Auto Holdings prevents the retroactive application of the Wayfair decision.
Quotables
- “Many states, like Massachusetts, have changed the definition of tangible personal property to say things that are tangible personal property plus software. We're just calling it a fiction. Fine. Okay. But what happens then is that now you have something that can be used simultaneously and exists simultaneously in many different states at the exact same time.That doesn't happen with the widget. So you have a new question.” -Richard Jones [09:57]
- “After the oracle decision, the floodgates opened for everyone filing abatement claims that didn't think they could before. And we've seen shifting sands in terms of the degree in which the department will be satisfied with the apportionment. I can't say I am happy with the way the sands have been shifting. Sometimes you can find out exactly what percentage of your employee headcount use the software and where they are because the software has a technology and sometimes you can't.” -Richard Jones [21:02]
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