Section 25 Sales Tax Modernization
Chapter 62C of the General Laws is hereby amended by inserting after section 16B, as inserted by section 30 of chapter 227 of the acts of 2020, the following section:-
Section 16C. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise:-
"Third party payment processor", any person engaged in the business of remitting payments to vendors or operators under chapters 64G, 64H, 64I, 64L or 64N, in association with credit card, debit card, or similar payment arrangements that compensate the vendor or operator in transactions subject to the excise under said chapters.
"Vendor or operator", a business that is obliged to file a return under section 16; provided that businesses with gross sales below a certain threshold, to be set by the commissioner in regulation, shall not be a "vendor or operator" if the business notifies a third party payment processor in writing that it is exempt from the provisions of this section.
(b) Any vendor or operator shall, in connection with seeking payments from or through a third party payment processor, separately identify tax amounts charged in association with the excise under chapters 64G, 64H, 64I, 64L or 64N and non-tax amounts for which payment is sought. Such separate identification shall be conducted in a manner approved by the commissioner, taking into account established industry practices to the extent practicable.
(c) A third party payment processor receiving a request for payment from a vendor or operator shall directly pay the identified tax portion of such request to the commissioner on a daily basis, at substantially the same time that any non-tax balance is paid to the vendor or operator.
(d) A third party payment processor shall report total payments made to the commissioner on a monthly return, in a manner provided by the commissioner, which return shall identify each vendor or operator to whom payments were made during the month and the amount of tax paid to the commissioner during the month in association with transactions with each such vendor or operator during that period.
(e) A third party payment processor shall report to each vendor or operator on a monthly basis, in a manner provided by the commissioner, the total tax remitted to the commissioner with respect to transactions of the particular vendor or operator during the monthly period.
(f) Tax amounts paid to the commissioner by a third party payment processor in association with the processing of transactions of a particular vendor or operator during the month shall be available as a credit to the vendor or operator in the filing of returns showing tax due under chapters 64G, 64H, 64I, 64L or 64N, as applicable.
This section requires third party processors (predominantly credit card companies) to remit to the Commonwealth, on a daily basis, the portion of a sale that is attributable to sales tax, with an effective date of July 1, 2024. There would be no change to the current schedule for reporting and remitting the sales tax for cash sales.