OCTOBER 16, 2015
27
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BUSINESS PULSE SURVEY
HOW BAD WILL THE EMC-DELL DEAL BE
FOR MASSACHUSETTS??
VOTES CAST: 312
51%
21%
R 51% A punch in the gut.
R 21% I don’t know.
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RICHARD L. JONES
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se
lu
cia
er
illustrates the point. Businesses should
be paying attention to it not only
because the case could impact their
bottom lines, but also because the case
says a lot about the unpredictability of
doing business in Massachusetts.
This case centers on a state
Department of Revenue’s new audit
position to apply a 6.25 percent
“use” tax to the full purchase price
of commercial vehicles purchased
elsewhere, provided that the vehicles
enter Massachusetts and were not
previously taxed.
DOR is imposing the tax even when
the vehicles travel on Massachusetts
roads infrequently, even less than 3
percent of the time.
DOR assessed Regency
Transportation Inc., a midsize
interstate trucking company, on its
fleet of trucks purchased in states that
m
om
Richard L. Jones is a Partner in
the Tax Department at Sullivan
& Worcester LLP in Boston.
either imposed no sales tax or had a
commonly available sale-tax exemption
for interstate commercial vehicles.
DOR applied the tax on 100 percent
of the trucks’ purchase price, slapping
Regency with more than $1 million
in taxes, interest and penalties. Since
Regency’s fleet on average used
Massachusetts’ roads to conduct
business only around 33 percent of the
time, and some assessed vehicles only 2
percent, it believes the tax on the entire
purchase price is not only a massive
overreach by the DOR, but also violates
the Commerce Clause of the U.S.
Constitution. (Regency is represented
by Kerstein Coren & Lichtenstein LLP)
Regency’s case is the furthest
along in the legal process, but it is
not alone. If the court sides with the
DOR, it could have wide-reaching
legal and economic ramifications for
certain companies that own fleets of
commercial vehicles that occasionally
run on Massachusetts roads.
Regency is headquartered in
Massachusetts, but its fleet travels
nationally. It started with one tractor
and a borrowed trailer in 1985 and
since has grown to a fleet of 150
tractors, 700 trailers, and a half-million
square feet of warehousing space in six
locations.
Regency employs 240 full-time and
30 part-time people.
The SJC will hear oral arguments on
the Regency case later this fall. All eyes
should be on this trucking company as
it makes its case against Massachusetts’
undue burden on interstate commerce
and blazes the trail for other businesses
large and small that will travel in its
path.
rc
t fo
No
Companies plan for, and accept, a certain amount of risk and volatility, but
when a state throws curveballs, it can
derail business plans and make owners
wonder whether doing business here is
worth the trouble.
A case currently before the
Massachusetts Supreme Judicial Court
ls
na
ur
Jo
All eyes on Regency and
‘undue burden’ in Mass.
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