After facing powerful arguments from ACMA and NetChoice, the Massachusetts Attorney General and Department of Revenue (DoR) effectively pulled their new regulation that established nexus for companies placing cookies on computers in the state or providing apps that are downloaded by state residents, which was a clear expansion of physical presence well beyond anything contemplated previously.
As Forbes said, Massachusetts gives up on new Internet sales tax rule acknowledging there were serious problems in law and process. Apparently, realizing they faced an adverse ruling in court following the ACMA/NetChoice legal challenge, the DoR and its counsel concluded it would be better to pull the regulation rather than suffer an adverse ruling.
This development occurred after our side won important injunctions against enforcement in South Dakota and Tennessee while the issue of “economic nexus” continues to be litigated in court. ACMA is a plaintiff in both states. The 6th Circuit Court in S.D. affirmed that no one other than the U.S. Congress and the Supreme Court itself has the privilege of re-writing precedent tested twice in the highest court of the land, and representing 150 years of well established federal doctrine.
While ACMA continues its work to clarify national legislation, it is critical to “stopping the insanity …when states attempt to unilaterally contravene established Supreme Court precedent,” said Hamilton Davison, ACMA President. “We’re very pleased that after hearing our arguments in court yesterday, the DoR realized they were in for a prolonged and ultimately losing legal battle,” said Steve DelBianco, Executive Director of NetChoice.