NORTHAMPTON, Mass. (WWLP) – Two trade associations are suing the state over a new internet sales tax.
It’s called “Directive 17-1” and it requires out of state internet companies to collect state sales taxes.
The trade associations, NetChoice and ACMA, filed a lawsuit against the Massachusetts regulation.
They said that the new rule is unconstitutional and violates the Internet Tax Freedom Act, a 2016 law that specifically stops states from imposing taxes that discriminate against the Internet.
Under the new law, out-of-state internet vendors with annual sales of at least $500,000 must collect sales taxes.
Mark Weinberg, the owner of Yes Computers in Northampton believes the new law promotes fairness.
“It’s a good law. We want an even playing field for all commerce.,”Weinberg told 22News. “I don’t think Massachusetts should be shorted that additional revenue.”
Directive 17-1 states that most internet companies use software that is tangible personal property, which should be subject to the sales tax.
The internet sales tax law is slated to go into effect July 1st.