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In Massachusetts, retailers’ cookies will soon lead to sales tax
The Bay State is saying that online stores providing cookies or apps to their Massachusetts customers have a ‘presence’ in that state.
A cookie is a kind of property in a location.
That statement, if maintained, could usher in a sea change in how online retailers tax users.
On July 1, the state of Massachusetts will begin enforcing a new directive from its Department of Revenue. It says online retailers must charge the state’s sales tax to customers in the state, if the retailers deposit or utilize a cookie — or a mobile app — on its customers’ machines.
Cookies, of course, are small text files that act as markers, letting a retailer know, for instance, that you looked at blue pants the last time you were on the site so it can personalize content the next time — even if you don’t log in.
Generally speaking, online retailers have not had to charge sales tax to their out-of-state customers, a pricing advantage compared to physical retailers in the 45 states that have sales tax. Federal rules say that retailers only have to charge sales tax if they have a physical presence in the state, such as a brick-and-mortar branch or a warehouse.