SENIOR STAFF ATTORNEY BEN ROBBINS IS FEATURED PROMINENTLY IN CURRENT MASSACHUSETTS LAWYERS WEEKLY ARTICLE ON MASSACHUSETTS SUPREME JUDICIAL COURT’S RECENT DECISION INVALIDATING STATE COMMISSIONER OF REVENUE’S 2017 REGULATION REQUIRING OUT-OF-STATE ONLINE RETAILERS, WITH NO PHYSICAL PRESENCE IN THE COMMONWEALTH, TO COLLECT A USE TAX FROM MASSACHUSETTS CUSTOMERS, BECAUSE THE REGULATION VIOLATED THE DORMANT COMMERCE CLAUSE DOCTRINE THEN IN EFFECT.
Ben Robbins, Senior Staff Attorney for the New England Legal Foundation, is featured prominently in the current Massachusetts Lawyers Weekly, in the article titled “SJC tax ruling settles issue for online retailers,” which covers the Massachusetts Supreme Judicial Court’s recent decent in U.S. Auto Parts Network, Inc. v. Commissioner of Revenue, in which Ben had filed a brief for NELF. (For those readers who have a Massachusetts Lawyers Weekly subscription, the article can be found online at https://masslawyersweekly.com/2023/01/05/sjc-tax-ruling-settles-issue-for-online-retailers/.) As Ben had argued for NELF, the SJC struck as unconstitutional the Commissioner of Revenue’s 2017 regulation that required out-of-state online retailers with no traditional physical presence in Massachusetts, such as U.S. Auto Parts (an online retailer of after-market auto parts headquartered in California), to collect a sales or use tax from Massachusetts customers and remit the tax to the Commonwealth. As Ben had argued, the Court held that the tax regulation violated the United States Supreme Court’s “substantial nexus” requirement under the “dormant” Commerce Clause,[1] as then interpreted by the Court. In particular, the regulation unlawfully substituted the electronic contacts of the modern internet economy, such as cookies and apps, for the brick-and-mortar physical contacts then required by the Supreme Court, such as offices, employees, and warehouses. U.S. Auto Parts had no such physical contacts in Massachusetts.
Indeed, only after the 2017 regulation’s promulgation did the Supreme Court disavow this old physical-presence standard, in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), by embracing the sufficiency of the electronic contacts of the internet economy to satisfy the “substantial nexus” requirement under the dormant Commerce Clause. And, as Ben had argued for NELF, the SJC held that Wayfair did not apply retroactively to sanitize the Commissioner’s rogue 2017 regulation, which had imposed a then-unexpected tax burden on out-of-state online retailers such as U.S. Auto Parts, along with substantial penalties and interest. In the article, Ben is quoted, in large fonts with an accompanying photo, as saying: “The alacrity with which the court decided this case demonstrates that it unhesitatingly understood the Supreme Court’s then-established dormant Commerce Clause Doctrine, its prospective change in Wayfair, and the invalidity of the 2017 regulation.” Ben is also quo
[1] The Commerce Clause provides, in relevant part, that “The Congress shall have Power . . . To regulate Commerce . . . among the several States . . .” U.S. Const. art. I, § 8, cl. 3. The United States Supreme Court has explained its longstanding dormant Commerce Clause doctrine as follows:
Although the Commerce Clause is written as an affirmative grant of authority to Congress, this Court has long held that in some instances it imposes limitations on the States absent congressional action. . . . First, state regulations may not discriminate against interstate commerce; and second, States may not impose undue burdens on interstate commerce.
South Dakota v. Wayfair, Inc., 138 S. Ct. 2080, 2089, 2091 (2018) (emphasis added).