Massachusetts: Proposal to Separately Report Online and In-Store Transactions Withdrawn

The Massachusetts Department of Revenue, in a news bulletin sent this week, advised taxpayers that it is withdrawing a previously announced change that would have required sales tax filers to separately report in-store sales versus online sales beginning in 2022. In a September news release, the Department had stated that taxpayers subject to the state’s new advance payment rules for sales tax and meals and room occupancy tax will be required to report several new items on their returns beginning next year. The news release stated that both sales tax and meals and room occupancy tax filers will be required to report any advance payment made and the amount of any calculated penalty. Sales tax filers would also be asked to break down online sales versus in-store sales. Meals and occupancy tax filers would be asked to break down cash sales versus credit card sales. The Department suggested that businesses should begin collecting this information now in order to prepare for the return changes.

In response to feedback from the Department’s Advisory Council, the Department decided to withdraw the requirement for sales tax filers to separately report in-store sales versus online sales because retailers may capture this information in different ways, and the information may not be available or accurate at the time the return is filed. Taxpayers should note, however, that the Department did not announce that it was withdrawing the upcoming requirement for meals and room occupancy tax filers to break down cash sales versus credit card sales. Please contact Jon Benson or Ryanne Tannenbaum with questions.