When Massachusetts residents buy tires in New Hampshire, a Connecticut company has to charge them the Mass tax, and that’s just not right, Town Fair Tires is claiming in a lawsuit.
Town Fair Tire Centers, based in East Haven, said in its lawsuit that the whole taxing situation could have wide-ranging implications for Massachusetts residents who shop in New Hampshire, which does not have sales tax.
The Boston Globe reports the lawsuit claims Massachusetts is violating the U.S. commerce clause of the U.S. Constitution by charging Massachusetts residents 5 percent sales tax on purchases made in New Hampshire.
A victory by the state could mean millions of dollars in new tax revenue annually. The case is likely to be heard next month.
Several companies that have filed suits claiming commerce clause violations argue that the U.S. Constitution provides only Congress with the power to regulate interstate commerce.
Under federal law, states cannot require out-of-state merchants to collect sales tax on their behalf, according to Internet Law: A Field Guide, a book written by Jonathan Hart and published in 2008.