Massachusetts SALT

On January 25, 2017, Governor Charlie Baker released his proposals for the Commonwealth’s fiscal year 2018 budget. Among the proposed tax/revenue changes in the proposal are the following:
  1. Extending sales tax collection responsibilities to online retailers who do not have a physical location in Massachusetts but who have sales in Massachusetts that exceed $500,000 annually. There are questions regarding whether this proposal violates the physical presence requirement of Quill and National Bellas Hess.
  2. Expanding the room occupancy tax to obligate individuals or businesses making short-term rentals to collect and remit the room occupancy tax on those rentals. Any provider of transient accommodations who provides accommodations for 150 days or more in a calendar year would be required to register with the Department of Revenue, and to collect and remit the occupancy tax. However, the proposal allows an intermediary to enter into an agreement with the Commissioner of Revenue to collect and remit the occupancy tax on behalf of an operator.
  3. Changing the sales tax remittance procedures to require third-party processors credit card companies, to remit the sales tax collected on a daily basis. This would apply to any transaction involving a vendor or third-party processor that employs fifty or more people.
  4. Creating a tax credit for eligible businesses that hire veterans after July 1, 2017. The credit could be applied to the tax year that begins on January 1, 2017 and thereafter.