The Massachusetts Appellate Tax Board (“ATB”) has issued an order denying three sales tax refund claims involving multiple points of use (“MPU”) sourcing. In each case, vendors had filed refund claims arguing that their customers were eligible for refunds of sales tax charged on the full sales price of software delivered to Massachusetts to the extent the software was actually used by the customer’s employees outside of Massachusetts. Massachusetts has issued regulations that permit vendors to apportion the sales price for certain sales of software delivered to a customer in Massachusetts for sales and use tax purchases using multiple points of use (“MPU”) apportionment. 830 CMR 64H.1.3(15). Under MPU apportionment, if a customer can provide documentation to the vendor that establishes that software delivered to Massachusetts is actually used in multiple states, then the vendor is relieved of its obligation to collect and remit Massachusetts sales tax on the software, and the customer is only required to remit Massachusetts use tax on the portion of the sales price for the software attributable to use of the software in Massachusetts. There is no question that MPU apportionment is permitted in Massachusetts, when claimed at the time of sale. However, over the past few years many taxpayers have been surprised when the Department of Revenue (the “Department”) denies sales tax refund claims claiming MPU apportionment filed by vendors on their behalf. According to petitions filed by the vendors with the ATB, the Department denied the refund claims based on a procedural technicality. Specifically, the vendors allege that the Department did not grant sales tax refunds applying MPU apportionment because the customers did not provide the vendor with an MPU certificate or other acceptable documentation of multiple points of use before the vendor remitted the tax to Massachusetts. The Department’s position is that once the tax is remitted by the vendor, a customer loses its ability to claim MPU apportionment. While there is some support for the Department’s position in its regulation, it is our view that the Department’s position is in conflict with statutory authority, as well as the Department’s own policy regarding other types of sales tax exemption certificates. (Click here to view our prior alert on the issue and how that policy contrasts with the Department’s treatment of similar exemption certificates). Several vendors have filed appeals with the ATB, challenging the Department’s denial of MPU refund claims filed on behalf of their customers, and on May 22, 2017, the ATB issued its first order in an MPU apportionment appeal. That order upholds the Department’s denial of the vendor’s refund claims. See Oracle USA, Inc. et. al v. Commissioner of Revenue, Appellate Tax Board Dckt Nos. C318441, C318442, and C327798 (May 22, 2017). Our understanding is that the ATB has received a request to publish a full opinion detailing its basis for denying the taxpayer’s refund claims. This opinion will provide more detail regarding the ATB’s thinking and whether it upheld the denial of the refund claim on the basis that the MPU documentation was not provided prior to the remittance of tax, or some alternative theory.