Massachusetts Sales and Use Tax Protest — Application for Abatement and ATB Appeal (with Wayfair / Economic Nexus Analysis)

MASSACHUSETTS SALES AND USE TAX PROTEST — APPLICATION FOR ABATEMENT AND APPELLATE TAX BOARD APPEAL

TABLE OF CONTENTS

1. Overview and Procedural Posture
2. Nexus Analysis Framework — Wayfair, Cookie Nexus, and Marketplace Facilitator
3. Deadline Computation Worksheet
4. Stage 1 — Form ABT Cover Letter
5. Stage 1 — Statement of Grounds
6. Stage 2 — Petition to the Appellate Tax Board (Caption)
7. Stage 2 — Petition Allegations
8. Common Substantive Defenses
9. Burden of Proof and Evidentiary Submission
10. Prayer for Relief
11. Signature, Verification, and Service Blocks
12. Massachusetts Practice Notes
13. Sources and References

1. OVERVIEW AND PROCEDURAL POSTURE

This template is used to protest a Massachusetts assessment of sales tax (G.L. c. 64H) or use tax (G.L. c. 64I), including assessments arising from:

• Vendor audit challenging collection, exemption certificates, or taxability;
• Economic-nexus assessment against a remote retailer under G.L. c. 64H § 34 and TIR 19-15;
• Marketplace facilitator collection responsibility;
• Use-tax assessment against a Massachusetts purchaser/consumer or a business consumer (e.g., capital purchases, software, services);
• Successor liability on business acquisitions under G.L. c. 62C § 51.

Procedure mirrors the income-tax framework: file Form ABT with the DOR under G.L. c. 62C § 37, then appeal to the independent Appellate Tax Board under G.L. c. 58A § 7 (formal) or § 7B (small claims) within 60 days of denial or 6 months of deemed denial.

2. NEXUS ANALYSIS FRAMEWORK — WAYFAIR, COOKIE NEXUS, AND MARKETPLACE FACILITATOR

2.1 Current Massachusetts Economic-Nexus Standard (Post-Wayfair)

2.2 Pre-Wayfair "Cookie Nexus" Background (Historical)

Before South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), Massachusetts asserted nexus over remote internet vendors by promulgating 830 CMR 64H.1.7 (effective October 1, 2017). The regulation theorized that internet vendors established physical presence in Massachusetts through:

• Software or apps installed on Massachusetts users' devices;
• "Cookies" placed on Massachusetts users' computers;
• Use of in-state content delivery networks (CDNs); and
• Relationships with in-state online marketplace platforms.

The cookie-nexus regulation applied to vendors with more than $500,000 in MA sales AND 100+ MA transactions in the preceding 12 months. After Wayfair validated economic nexus and Massachusetts enacted G.L. c. 64H § 34 (codified through TIR 19-15), the cookie-nexus theory was effectively superseded for prospective enforcement, although litigation over pre-Wayfair periods continued (see U.S. Auto Parts Network, Inc. v. Commissioner of Revenue, ATB Docket No. C339523 (2021), and related Appeals Court / SJC review). For pre-October 2019 periods, the cookie-nexus regulation may still be at issue.

2.3 Nexus Issues Checklist

• ☐ Did taxpayer exceed $100,000 in MA sales in the audit period? Provide year-by-year breakdown.
• ☐ For pre-October 2019 periods: did taxpayer have any in-state physical presence (employees, inventory, contractors, FBA)?
• ☐ For pre-October 2019 periods: did the cookie-nexus regulation 830 CMR 64H.1.7 apply, and is the regulation valid as applied?
• ☐ Is the taxpayer a marketplace facilitator under G.L. c. 64H § 1?
• ☐ Is the taxpayer a marketplace seller (i.e., third-party seller) for whom the facilitator should collect?
• ☐ Are sales properly sourced under destination-based sourcing?
• ☐ Are exempt sales (resale, manufacturing exemption, casual and isolated, etc.) properly documented with Forms ST-4, ST-12, ST-12B, etc.?

3. DEADLINE COMPUTATION WORKSHEET

4. STAGE 1 — FORM ABT COVER LETTER

[LAW FIRM LETTERHEAD]

Date: [DATE]

Massachusetts Department of Revenue

Customer Service Bureau — Abatement Unit

P.O. Box 7058

Boston, MA 02204

Re: Application for Abatement under G.L. c. 62C § 37 — Sales/Use Tax

Taxpayer: [NAME]

FEIN: [######]

Tax Type: ☐ Sales Tax (G.L. c. 64H) ☐ Use Tax (G.L. c. 64I)

Period(s): [QUARTERS / YEARS]

Notice / Assessment No.: [NUMBER]

Amount in Dispute: $[AMOUNT]

Dear Commissioner:

Enclosed is Form ABT, Application for Abatement, filed on behalf of the above-named taxpayer pursuant to G.L. c. 62C § 37 and 830 CMR 62C.37.1, with all supporting information, documents, and authorities. The Application is timely filed within the latest applicable period under G.L. c. 62C § 37.

The taxpayer [does / does not] request a hearing. A Power of Attorney (Form M-2848) accompanies this filing.

Respectfully submitted,

[________________________________]

[ATTORNEY NAME], BBO No. [######]

Counsel for [TAXPAYER]

5. STAGE 1 — STATEMENT OF GROUNDS

5.1 Identification

1.1. Taxpayer: [FULL LEGAL NAME], [ENTITY TYPE] with principal place of business at [ADDRESS] [and registered to collect MA sales/use tax under Sales Tax Account No. [######]].

1.2. Tax type and period: Massachusetts [Sales Tax under G.L. c. 64H / Use Tax under G.L. c. 64I] for [PERIODS].

1.3. Notice contested: [Notice of Assessment / NIA / Failure to File] dated [__/__/____], Assessment No. [NUMBER] in the total amount of $[AMOUNT] (tax of $[AMOUNT], interest of $[AMOUNT], penalties of $[AMOUNT]).

5.2 Procedural Timeliness

2.1. Original return filed on [__/__/____] (if applicable).

2.2. Tax assessed on [__/__/____].

2.3. Tax paid on [__/__/____] (if applicable).

2.4. This Application is filed on [__/__/____], within the latest applicable period under G.L. c. 62C § 37.

5.3 Factual Background

3.1. [BUSINESS DESCRIPTION — products/services sold; channels (own website, marketplaces); MA-related activities; customer locations.]

3.2. [NEXUS / SALES TIMELINE — year-by-year MA sales volume; presence of any in-state employees/property/inventory; marketplace participation.]

3.3. [AUDIT DESCRIPTION — sample method, error rate, projection, exemption certificates challenged.]

5.4 Grounds for Abatement

4.1. No Substantial Nexus. Taxpayer did not exceed the $100,000 economic-nexus threshold under G.L. c. 64H § 34 in the audit period(s) and had no physical presence in Massachusetts. [INSERT YEAR-BY-YEAR SALES SUMMARY.]

4.2. Marketplace Facilitator Already Collecting. Sales for which DOR seeks tax were facilitated by a marketplace facilitator that collected and remitted Massachusetts tax under G.L. c. 64H § 34. The taxpayer (as marketplace seller) is not liable for those sales.

4.3. Sales Were Exempt. The transactions at issue were exempt under G.L. c. 64H § 6, including:

• ☐ § 6(c) — Sales for resale (Form ST-4);
• ☐ § 6(r), (s) — Manufacturing, R&D, and industrial-plant exemptions;
• ☐ § 6(d) — Casual and isolated sales;
• ☐ § 6(jj) — Sales of food products;
• ☐ § 6(k) — Sales of clothing under $175;
• ☐ Other: [___].

4.4. Use Tax Inapplicable. The taxpayer either (i) paid sales tax to another state at a rate equal to or exceeding the Massachusetts rate (credit under G.L. c. 64I § 7(c)), (ii) qualifies for an exemption under G.L. c. 64I § 7, or (iii) the property was not used or stored in Massachusetts.

4.5. Improper Sample / Projection. The auditor's sample was not representative or the projection methodology was statistically unsound.

4.6. Statute of Limitations. The assessment was issued outside the period prescribed by G.L. c. 62C § 26.

4.7. Penalty Abatement. Penalties should be abated for reasonable cause under G.L. c. 62C § 33(f) because [reasonable reliance on professional advice / good-faith application of unsettled nexus law / first-time issue].

4.8. Cookie-Nexus Periods (if applicable). For periods before October 1, 2019, taxpayer challenges the validity and application of 830 CMR 64H.1.7 to the extent the assessment relies on physical-presence theories rooted in cookies, apps, or CDN use absent in-state human or property presence.

5.5 Supporting Documentation

• ☐ Year-by-year MA sales schedule with source documents
• ☐ Marketplace facilitator certifications and tax-collection attestations
• ☐ Exemption certificates (Forms ST-4, ST-5, ST-12, ST-12B)
• ☐ Purchase invoices and proof of out-of-state tax paid (use tax)
• ☐ Audit workpapers and sampling worksheets
• ☐ Form M-2848 (Power of Attorney)

6. STAGE 2 — PETITION TO THE APPELLATE TAX BOARD (CAPTION)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

Docket No. [________________________________]

PETITION UNDER FORMAL PROCEDURE — SALES/USE TAX — G.L. c. 58A § 7

7. STAGE 2 — PETITION ALLEGATIONS

7.1 Jurisdiction

1.1. This is an appeal under G.L. c. 62C § 39 and G.L. c. 58A §§ 6, 7 from the [denial / deemed denial] of Appellant's Application for Abatement filed under G.L. c. 62C § 37.

1.2. Appellant is [an entity organized under the laws of [STATE] with principal place of business at [ADDRESS]].

1.3. Appellee is the Commissioner of Revenue, with offices at 100 Cambridge Street, Boston, Massachusetts.

7.2 Procedural History

2.1. The DOR issued a Notice of Assessment dated [__/__/____] assessing [Sales / Use] tax of $[AMOUNT], interest of $[AMOUNT], and penalties of $[AMOUNT] for periods [PERIODS].

2.2. Appellant timely filed Form ABT on [__/__/____].

2.3. The Commissioner [denied the Application by Notice of Abatement Determination dated [__/__/____] / failed to act within six months, resulting in deemed denial under G.L. c. 58A § 6].

2.4. This Petition is filed within [60 days of the Notice of Abatement Determination / 6 months of the deemed denial].

2.5. The contested tax has been paid in full, except for the portion specifically claimed as not due, in accordance with G.L. c. 62C § 39.

7.3 Statement of Issues

3.1. Whether Appellant had substantial nexus with Massachusetts under G.L. c. 64H § 34 and the Commerce Clause as construed in Wayfair.

3.2. Whether the transactions at issue were exempt under G.L. c. 64H § 6.

3.3. Whether the Commissioner's audit methodology, including sampling and projection, was statistically reliable.

3.4. Whether penalties should be abated for reasonable cause under G.L. c. 62C § 33(f).

7.4 Argument

4.1. [Nexus argument — apply Wayfair / G.L. c. 64H § 34 / TIR 19-15 to taxpayer's MA sales by year. If pre-Oct. 2019 periods are at issue, address 830 CMR 64H.1.7 and challenges to cookie-nexus theory.]

4.2. [Exemption argument — point to specific exemption certificates and statutory subsections.]

4.3. [Sampling argument — cite ATB precedent on statistical sampling, including standards from Massachusetts and analogous jurisdictions.]

4.4. [Penalty abatement argument — reasonable cause, reliance on counsel, novel legal issue.]

8. COMMON SUBSTANTIVE DEFENSES

9. BURDEN OF PROOF AND EVIDENTIARY SUBMISSION

9.1. The taxpayer bears the burden of proving entitlement to abatement. Towle v. Commissioner of Revenue, 397 Mass. 599 (1986).

9.2. The Commissioner's assessment is presumptively correct.

9.3. Anticipated evidence:

• ☐ Sales reports by state and channel;
• ☐ Marketplace facilitator certifications;
• ☐ Exemption certificates;
• ☐ Use-tax accrual workpapers;
• ☐ Expert testimony on statistical sampling and nexus economics;
• ☐ Stipulations.

10. PRAYER FOR RELIEF

WHEREFORE, Appellant respectfully requests:

• A. Abatement of sales/use tax assessed in the amount of $[AMOUNT];
• B. Abatement of associated interest and penalties;
• C. Refund with statutory interest under G.L. c. 62C § 40;
• D. Findings of fact and report under G.L. c. 58A § 13;
• E. Such other and further relief as is just and proper.

11. SIGNATURE, VERIFICATION, AND SERVICE BLOCKS

Date: [DATE]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], BBO No. [######]

Counsel for Appellant [TAXPAYER]

[ADDRESS]

Telephone: [NUMBER]

Email: [EMAIL]

Verification

I, [OFFICER NAME], [TITLE] of Appellant, declare under the pains and penalties of perjury that I have read the foregoing Petition and that the statements contained therein are true to the best of my knowledge and belief.

Date: [__/__/____]

[________________________________]

[OFFICER NAME]

Certificate of Service

I certify that on [__/__/____] I served a true copy of this Petition on the Commissioner of Revenue, Litigation Bureau, P.O. Box 9565, Boston, MA 02114-9565, by [first-class mail / hand delivery / electronic filing through eAccess].

[________________________________]

[ATTORNEY NAME]

12. MASSACHUSETTS PRACTICE NOTES

• $100,000 only — no transaction count. Massachusetts is one of the relatively few states that uses ONLY a sales-dollar threshold for economic nexus. Do not import "200 transactions" language from other states' statutes; G.L. c. 64H § 34 has no transaction-count component.
• "Current or prior calendar year." The statute uses a two-year lookback. A taxpayer who exceeds $100,000 in either the current OR prior calendar year is a vendor for the current year.
• Cookie-nexus history. 830 CMR 64H.1.7 (effective Oct. 1, 2017) was the DOR's pre-Wayfair attempt to assert physical presence over remote internet vendors via cookies, apps, and CDNs. Litigation over its validity continued for pre-Oct. 2019 periods even after Wayfair and the enactment of § 34. Counsel handling pre-Wayfair audits should preserve constitutional and regulatory-validity challenges.
• Marketplace facilitator. Under G.L. c. 64H § 34, marketplace facilitators are responsible for collecting tax on third-party (marketplace seller) sales when the marketplace's combined sales into MA exceed $100,000 in the current or prior calendar year. Marketplace sellers should obtain certifications confirming the facilitator's collection and exclude facilitator-collected sales from their own returns to avoid double counting.
• Form ABT and ATB are the same path as income tax. Sales/use tax disputes follow the identical procedural path: Form ABT under G.L. c. 62C § 37 → Notice of Abatement Determination (or deemed denial after 6 months) → ATB petition within 60 days (or 6 months of deemed denial) → optional Appeals Court review on questions of law.
• Exemption certificates must be in good faith. Under G.L. c. 64H § 8, a vendor accepting an exemption certificate in good faith is relieved of collection liability. Audit defense often turns on the timeliness and form of certificates (ST-4, ST-5, ST-12, ST-12B, ST-13).
• Sampling and projection. The ATB has accepted statistical sampling but requires that the sample be representative and the projection methodology sound. Challenge auditor methodology with expert support where appropriate.
• Successor liability. Buyers of Massachusetts businesses should obtain a Tax Lien Waiver and Letter of Good Standing (G.L. c. 62C § 51, § 52). If acquired without these, successor sales-tax liability may attach.
• Use-tax exposure on capital purchases. Massachusetts use tax (G.L. c. 64I) frequently arises on out-of-state equipment, software, and SaaS purchases. Reconcile use-tax accruals to fixed-asset additions before audit.
• Pay-to-play. Generally, contested tax must be paid before the ATB exercises jurisdiction (G.L. c. 62C § 39).

13. SOURCES AND REFERENCES

• G.L. c. 64H (Sales Tax) — https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter64H
• G.L. c. 64H § 34 (Economic Nexus / Marketplace Facilitator) — https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter64H/Section34
• G.L. c. 64I (Use Tax) — https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter64I
• G.L. c. 62C § 37 (Application for Abatement) — https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62C/Section37
• G.L. c. 62C § 39 (Appeal to ATB) — https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62C/Section39
• G.L. c. 58A (Appellate Tax Board) — https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter58A
• 830 CMR 64H.1.7 (Vendors Making Internet Sales — cookie nexus) — https://www.mass.gov/regulations/830-CMR-64h17-vendors-making-internet-sales
• 830 CMR 64H.1.9 (Remote Retailers and Marketplace Facilitators) — https://www.mass.gov/regulations/830-CMR-64h19-remote-retailers-and-marketplace-facilitators
• TIR 19-15 (Sales and Use Tax Collection Obligations of Remote Retailers and Marketplace Facilitators) — https://www.mass.gov/technical-information-release/tir-19-15
• TIR 88-13 (Sales Nexus; Amendment of G.L. c. 64H § 1(5)) — https://www.mass.gov/technical-information-release/tir-88-13-sales-nexus-amendment-of-gl-c-64h-ss-15
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• Quill Corp. v. North Dakota, 504 U.S. 298 (1992) (overruled by Wayfair)
• Towle v. Commissioner of Revenue, 397 Mass. 599 (1986)
• Mass. DOR sales/use tax forms — https://www.mass.gov/lists/dor-sales-and-use-tax-forms-and-instructions
• Appellate Tax Board — https://www.mass.gov/orgs/appellate-tax-board

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Massachusetts must review and customize this document before filing. Sales and use tax statutes, regulations, nexus thresholds, and TIRs change frequently; verify all authorities and deadlines before use.