Cookie nexus’ does not constitute physical presence for Commerce Clause purposes in pre-Wayfair periods.

In December 2022, the Massachusetts Supreme Judicial Court issued its ruling in U.S. Auto Parts Network, Inc. v. Commissioner concluding that the Commissioner of Revenue could not apply the new nexus rules instituted after Wayfair to apply sales tax retroactively to the years at issue in this case. The Court further concluded that what the Commissioner described as “electrons” in the Commonwealth does not satisfy the applicable physical presence test to require collection of sales and use tax. It should be noted that the Court’s decision only addressed the tax years between October 2017 and October 2019, before new regulations were in place to follow the Wayfair decision.

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