In Massachusetts, retailers’ cookies will soon lead to sales tax

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.

[Read the full article on MarTech Today.]

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About The Author

Barry Levine covers marketing technology for Third Door Media. Previously, he covered this space as a Senior Writer for VentureBeat, and he has written about these and other tech subjects for such publications as CMSWire and NewsFactor. He founded and led the web site/unit at PBS station Thirteen/WNET; worked as an online Senior Producer/writer for Viacom; created a successful interactive game, PLAY IT BY EAR: The First CD Game; founded and led an independent film showcase, CENTER SCREEN, based at Harvard and M.I.T.; and served over five years as a consultant to the M.I.T. Media Lab. You can find him at LinkedIn, and on Twitter at xBarryLevine.

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Author: Barry Levine

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