Appeal from a decision of the Appellate
The Supreme Judicial Court granted an
application for direct appellate review.
Julie E. Green, Assistant Attorney
General, for Commissioner of Revenue.
George S. Isaacson (Martin I. Eisenstein
& David Swetnam-Burland, of Maine, & Jamie E. Szal also present) for
The following submitted briefs for amici
Ben Robbins & Daniel B. Winslow for
New England Legal Foundation.
Tyler L. Martinez, of the District of
Columbia, & Karen A. Pickett for National Taxpayers Union Foundation.
Frank J. Bailey, Selena Fitanides, John C.
La Liberte, Matthew Schaefer, & Richard L. Jones for PioneerLegal, LLC.
WENDLANDT, J. For more than half a century, the United
States Supreme Court adhered to a "bright-line rule" as it pertained
to the constitutional limits of a State's authority to impose an obligation on
a nondomiciliary seller to collect and remit a sales or use tax when a consumer
purchases its goods or services for use or consumption in the State. See National Bellas Hess, Inc. v. Department
of Revenue of Ill., 386 U.S. 753, 758 (1967) (Bellas Hess), overruled by South
Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) (Wayfair). See also Quill Corp. v. North Dakota, 504
U.S. 298, 317 (1992) (Quill), overruled by Wayfair, supra. This rule, the Court maintained, was rooted
in the dormant commerce clause of the United States Constitution, and it
required the nondomiciliary seller to have some "physical presence"
in the taxing State. Quill, supra at
314. The rigid rule, the Court
acknowledged, was somewhat arbitrary but had the benefit of encouraging settled
expectations; a clear rule was necessary, the Court reasoned, so as to allow
States and nondomiciliary sellers to conduct their affairs in reliance on the
fixed constitutional test. Id. at 315.
In 2018, urged by States, including
Massachusetts, which argued that they were losing substantial tax revenues
because the bright-line rule stifled their ability to tax the growing number of
commercial transactions conducted over the Internet, see Brief for Colorado et
al., as Amici Curiae Supporting Petitioner, at 5-12, Wayfair, 138 S. Ct. 2080
(Wayfair amicus brief), the Court altered course. In advocating for the change, the States
represented to the Court that sellers' reliance interests were not a valid
concern in its analysis whether to abrogate the decades old, bright-line
test. Id. at 18-21. They assured the Court that any change to the
constitutional test would not be applied retroactively to upset settled
expectations. Id. at 19-20. States, they said, had either regulations that
prohibited retroactive application, or procedures that would provide notice and
a comment period before application, of any newly announced rule. Id.
Accordingly, the Court concluded that the physical presence test no
longer made economic sense and was no longer constitutionally required. Wayfair, supra at 2099.
Now, the Commissioner of Revenue
(commissioner) asks us to construe a pre-2018 regulation -- namely, 830 Code
Mass. Regs. § 64H.1.7 (2017), Vendors Making Internet Sales (regulation)
-- to incorporate the Court's new rule retroactively so as to permit him to
impose on a nondomiciliary seller the obligation to collect and remit a use tax
for periods prior to the Court's decision.
We decline to do so. Instead, we
conclude that the regulation incorporates the bright-line rule set forth in the
Court's pre-2018 jurisprudence and does not by its plain terms permit the
commissioner to apply the Court's new rule to the tax period at issue in the
present case. Further concluding that
the existence of what the commissioner described as "electrons" in
the Commonwealth does not satisfy the applicable physical presence test, we
affirm the decision of the Appellate Tax Board (board) permitting the abatement
requested by the nondomiciliary seller, U.S. Auto Parts Network, Inc. (U.S.
Background. a. U.S. Auto Parts. During the relevant tax period, U.S. Auto
Parts was an online retailer that sold after-market automobile parts and
accessories; it was headquartered in California. U.S. Auto Parts did not own or lease any
offices, facilities, inventory, or equipment in the Commonwealth. Nor did it have any employees or
representatives in the Commonwealth. Instead,
the company sold its products over the Internet through websites and mobile
applications ("apps") and sometimes by catalog, to customers
throughout the United States, including consumers in the Commonwealth.
A customer could download an app onto a
portable device from various locations with Internet connectivity, including
from within the Commonwealth, for use anywhere with the requisite Internet
access. The app would then be stored on
the customer's portable device, including customer devices located in the
Commonwealth. U.S. Auto Parts had its
products delivered to customers by common carrier from locations outside of
Like many online retailers, U.S. Auto
Parts used "cookies" on its websites. After a customer accessed one of the
company's websites, cookies were delivered to the Internet browser of the
customer's digital device, and they recorded and maintained data about the
customer's online activities. U.S.
Auto Parts used the customer information obtained through the cookies as part
of its business.
U.S. Auto Parts also used content delivery
networks (CDNs) operated and maintained by Akamai Technologies, Inc. (Akamai),
and Cloudflare, Inc. (Cloudflare).
Copies of the computer code from U.S. Auto Parts's websites were placed
onto Akamai's or Cloudflare's servers for delivery to website users, enabling
these users to access the websites stored on those servers, rather than on the
websites' host servers. U.S. Auto Parts
did not control the location of servers used by Akamai and Cloudflare, but
transactions on U.S. Auto Parts's websites have been traced to Akamai servers
During the twelve months preceding October
2017, U.S. Auto Parts earned more than $500,000 in Massachusetts Internet sales
from more than one hundred online transactions.
At oral argument, the commissioner described U.S. Auto Parts's
connections to the Commonwealth -- the apps, cookies, and CDNs -‑ as
"electrons" existing in the Commonwealth; we consider that
representation as well as the more detailed, technical definitions set forth
supra in our analysis.
assessment. In September 2017, the audit
division of the Department of Revenue (department) sent a letter to U.S. Auto
Parts, explaining that the department promulgated the regulation, effective on
October 1, 2017, which the department believed would apply to U.S. Auto Parts. Pursuant to the regulation, beginning on
October 1, 2017, a nondomiciliary vendor that employed, inter alia, apps,
cookies, or CDNs in connection with its sale of goods or services in the
Commonwealth would be required to "register, collect, and remit
Massachusetts sales or use tax" for the three months from October 1, 2017,
to December 31, 2017, "if during the preceding 12 months,
October 1, 2016 to September 30, 2017, the vendor had in excess of
$500,000 in Massachusetts sales completed over the Internet and made sales
resulting in a delivery into Massachusetts in [one hundred] or more
transactions." 830 Code Mass. Regs.
§ 64H.1.7(3). Other relevant provisions
of the regulation are discussed infra.
According to the department's estimates,
the letter advised, U.S. Auto Parts would likely meet the regulation's
thresholds, triggering its application.
The letter directed U.S. Auto Parts to register as a vendor through the
department's website, MassTaxConnect, by October 1, 2017, and indicate that
it was an Internet vendor with no in-State location.
U.S. Auto Parts neither registered nor
filed use taxes for the period from October 1, 2017, to October 31, 2017 (the
tax period at issue). In March 2018,
following notice to U.S. Auto Parts of its failure to register and of the
commissioner's intent to assess use taxes pursuant to the regulation, the
commissioner issued a notice of assessment in the amount of $60,139.81. The next month, U.S. Auto Parts filed an
application for abatement, which the commissioner denied in
Procedural history. U.S. Auto
Parts timely appealed to the board. On
the parties' cross motions for summary judgment, the board decided in favor of
U.S. Auto Parts, granting it an abatement as to the full amount of the tax,
interest, and penalties. The board
rejected the commissioner's argument that the Supreme Court's 2018 decision in
Wayfair, 138 S. Ct. 2080, which as discussed infra abrogated the "physical
presence" rule, applied retroactively to the tax period at issue. Instead, the board concluded that the Court's
prior jurisprudence, limiting States to imposing an obligation to collect and
remit a sales or use tax only on nondomiciliary sellers with an in-State
physical presence, see Quill, 504 U.S. at 314, governed its analysis. The board also determined that U.S. Auto
Parts's use of apps, cookies, and CDNs did not constitute the physical presence
required under Quill. The commissioner
timely appealed, and U.S. Auto Parts applied to this court for direct appellate
review, which we allowed.
Analysis. a. Standard of review. "We defer to the board's expertise with
respect to the interpretation of tax laws in the Commonwealth." VAS Holdings & Invs. LLC v. Commissioner
of Revenue, 489 Mass. 669, 674 (2022) (VAS Holdings). See Oracle USA, Inc. v. Commissioner of
Revenue, 487 Mass. 518, 522 (2021) ("Because the board is an agency
charged with administering the tax law and has expertise in tax matters, we
give weight to its interpretation of tax statutes" [citation and
alteration omitted]). "We will not
reverse a decision of the board 'if it is based on substantial evidence and on
a correct application of the law.'"
Macy's E., Inc. v. Commissioner of Revenue, 441 Mass. 797, 800, cert.
denied, 543 U.S. 957 (2004), quoting Bill DeLuca Enters., Inc. v. Commissioner
of Revenue, 431 Mass. 314, 315 (2000).
If the board's construction of a tax law "is reasonable, we will
defer to its interpretation."
Oracle USA, Inc., supra. "At
the same time, principles of deference are not principles of abdication; '[t]he
proper interpretation of a statute is a question of law for us to
resolve.'" Id., quoting
Commissioner of Revenue v. Gillette Co., 454 Mass. 72, 76 (2009). "[W]e accord the words of a regulation
their usual and ordinary meaning."
Warcewicz v. Department of Envtl. Protection, 410 Mass. 548, 550
(1991). "[T]he authority to tax
must be plainly conferred and . . . any ambiguity must be resolved in
favor of the taxpayer."
Commissioner of Revenue v. Oliver, 436 Mass. 467, 473 (2002). Finally, as it pertains to constitutional
issues, "we apply our 'independent judgment.'" VAS Holdings, supra, quoting WB&T Mtge.
Co. v. Assessors of Boston, 451 Mass. 716, 721 (2008).
Legal framework. i. Use tax statute. The Commonwealth imposes an excise tax on
tangible personal property purchased from a vendor for storage, use, or other
consumption in the Commonwealth. See
G. L. c. 64I, § 2.
Responsibility for payment of the use tax generally falls on the
purchaser, see G. L. c. 64I, § 3; however, in certain instances,
the Commonwealth places that burden on the vendor, which must collect and remit
the use tax. During the tax period at
vendor engaged in business in the commonwealth and making sales of tangible
personal property or services for storage, use or other consumption in the
commonwealth . . . shall at the time of making the sales . . .
collect the [use] tax from the purchaser . . . . The tax required to be collected by the
vendor shall constitute a debt owed by the vendor to the commonwealth."
c. 64I, § 4, as amended through St. 2009, c. 166, § 26.
Amended in 1988, St. 1988, c. 202, § 19
(1988 amendment), the version of the statute applicable to the tax period at
issue, and relevant to the issues in this case, defined a vendor
"[e]ngaged in business in the commonwealth" as one
or systematically soliciting orders . . . for the sale of tangible
personal property for delivery to destinations in the commonwealth; [or]
otherwise exploiting the retail sales market in the commonwealth through any
means whatsoever, including, but not limited to . . . solicitation
materials sent through the mails or otherwise . . . [and] advertising
. . . in . . . computer networks or in any other
c. 64H, § 1 (made applicable to use tax pursuant to G. L.
c. 64I, § 1, as amended through St. 1990, c. 121,
In response to the 1988 amendment, the
commissioner issued Technical Information Release (TIR) 88-13, explaining that
the 1988 amendment purported to expand the Commonwealth's jurisdiction to
enable collection of sales and use taxes from nondomiciliary vendors "that
regularly solicit orders for sales from Massachusetts customers,
. . . but that do not maintain a business location in the
Commonwealth." See TIR 88-13 (Dec.
8, 1988). However, the commissioner
advised the public that the department would "refrain from enforcing"
the newly expanded taxing authority "until [F]ederal statutory or case law
specifically authorizes each [S]tate to require foreign mail order vendors to
collect sales and use taxes on goods delivered to that [S]tate." Id., citing Department of Revenue, 1988
Legislative Recommendations of the Commissioner of Revenue, at 134 (Nov. 1987).
Pre-2018 constitutional limitations regarding nondomiciliary
sellers. The due process and commerce
clauses of the United States Constitution limit the States' authority to tax. This case implicates the limitations grounded
in the commerce clause, which expressly authorizes Congress to "regulate
Commerce . . . among the several States." Art. I, § 8, of the United States Constitution. "It has been construed as having a
negative sweep, referred to as the 'dormant' commerce clause, which prohibits
States from levying 'taxes that discriminate against interstate commerce or
that burden it by subjecting activities to multiple or unfairly apportioned
taxation.'" VAS Holdings, 489 Mass.
at 675 n.8, quoting MeadWestvaco Corp. ex rel. Mead Corp. v. Illinois Dep't of
Revenue, 553 U.S. 16, 24 (2008). It is
founded on structural concerns about the effects of a State's tax on the
national economy; it reflects
concern of the Framers that was an immediate reason for calling the
Constitutional Convention: the
conviction that in order to succeed, the new Union would have to avoid the
tendencies toward economic Balkanization that had plagued relations among the
Colonies and later among the States under the Articles of
Wayfair, 138 S.
Ct. at 2089, quoting Hughes v. Oklahoma, 441 U.S. 322, 325-326 (1979). Still, the commerce clause does not prohibit
a State from taxing interstate commerce altogether; to the contrary,
"interstate commerce may be required to pay its fair share of [S]tate
taxes." D.H. Holmes Co. v.
McNamara, 486 U.S. 24, 31 (1988).
Instead, two principles bind a State's
authority to regulate interstate commerce.
First, "[S]tate regulations may not discriminate against interstate
commerce." Wayfair, 138 S. Ct. at
2091. See, e.g., Philadelphia v. New
Jersey, 437 U.S. 617, 618, 628 (1978) (law prohibiting importation of most
"solid or liquid waste which originated or was collected outside the
territorial limits of the State" was unconstitutional because it
"impose[d] on out-of-[S]tate commercial interests the full burden of
conserving the State's remaining landfill space"). State regulations that do so discriminate
face "a virtually per se rule of invalidity." Wayfair, supra, quoting Granholm v. Heald,
544 U.S. 460, 476 (2005).
Second, "States may not impose undue
burdens on interstate commerce."
Wayfair, 138 S. Ct. at 2091. See,
e.g., Kassel v. Consolidated Freightways Corp. of Del., 450 U.S. 662, 671
(1981) (Iowa truck-length limitations unconstitutionally burdened interstate
commerce because they significantly impaired Federal interest in efficient and
safe transportation, and State's safety interest was illusory). Even-handed State regulations applicable to
taxes will be upheld "unless the burden imposed on [interstate] commerce
is clearly excessive in relation to the putative local benefit." Wayfair, supra, quoting Pike v. Bruce Church,
Inc., 397 U.S. 137, 142 (1970).
In view of these two principles, the
Supreme Court has set forth a four-prong framework that governs the limits of
State taxation of interstate commerce.
Specifically, "[t]he Court will sustain a tax so long as it
(1) applies to an activity with a substantial nexus with the taxing State,
(2) is fairly apportioned, (3) does not discriminate against
interstate commerce, and (4) is fairly related to the services the State
provides." Wayfair, 138 S. Ct. at
2091. See Complete Auto Transit, Inc. v.
Brady, 430 U.S. 274, 279 (1977).
Until 2018, the Supreme Court concluded
that the "substantial nexus" requirement (prong one of the commerce
clause framework) was satisfied only if a nondomiciliary entity had a
"physical presence" in the taxing State. Compare Quill, 504 U.S. at 302-303 (State
precluded from imposing obligation to collect and remit use tax on
nondomiciliary seller engaging "in regular or systematic solicitation of a
consumer market in th[e] [S]tate" but lacking in-State physical presence),
and Bellas Hess, 386 U.S. at 758 (State regulation obligating nondomiciliary
vendor to collect and remit use tax unconstitutional where vendor, which sent
flyers and catalogs into State and used common mail carriers to deliver orders
to in-State customers, otherwise lacked in-State physical presence), with
Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 364 (1941) (commerce clause
not violated where nondomiciliary seller had in-State retail stores), and Felt
& Tarrant Mfg. Co. v. Gallagher, 306 U.S. 62, 68 (1939) (commerce clause
not violated where nondomiciliary seller had local agents).
For more than half a century, the Court
drew a sharp distinction between "sellers with retail outlets, solicitors,
or property within a State, and those who do no more than communicate with
customers in the State by mail or common carrier as part of a general
interstate business." Bellas Hess,
386 U.S. at 758. See Goldberg v. Sweet,
488 U.S. 252, 263 (1989) (fact that interstate telephone call terminated in
State failed to provide substantial nexus absent physical presence of seller);
D.H. Holmes Co., 486 U.S. at 26, 32-33 (use tax permissible where
nondomiciliary company had "'nexus' aplenty" comprised of catalogs
printed at company's direction outside State and shipped to prospective customers
within State, and where company had stores and over $100 million in annual
sales in State); Commonwealth Edison Co. v. Montana, 453 U.S. 609, 617 (1981)
(State levying severance tax on coal mined in State was permissible because it
had obvious nexus); National Geographic Soc'y v. California Bd. of
Equalization, 430 U.S. 551, 559-600 (1977) (use tax on nonprofit soliciting
advertising for monthly magazine had sufficient nexus because nonprofit had two
offices in State, even if those offices played no part in taxed activity).
Indeed, in 1992, approximately four years
after the Commonwealth adopted the 1988 amendment, the Court considered a
similar statute adopted by North Dakota that also purported to impose an
obligation on nondomiciliary sellers that systematically transacted business in
North Dakota to collect and remit a use tax despite not having a physical
presence in the State. Quill, 504 U.S.
at 301. The Court declined to abrogate
"the bright-line rule" that physical presence was required to satisfy
the substantial nexus requirement of the commerce clause. Id. at 317.
The Court acknowledged that the physical
presence requirement "appears artificial at its edges," and that
"[w]hether or not a State may compel a vendor to collect a sales or use
tax may turn on the presence in the taxing State of a small sales force, plant,
or office." Id. at 315. Nevertheless, the Court concluded that that
"artificiality" was "more than offset by the benefits of a clear
rule." Id. The rule, the Court reasoned, "firmly
establishe[d] the boundaries of legitimate [S]tate authority to impose a duty
to collect sales and use taxes and reduce[d] litigation concerning those
Additionally, the bright-line rule
"encourage[d] settled expectations and, in doing so, foster[ed] investment
by businesses and individuals." Id.
at 316. The bright-line physical
presence rule, the Court acknowledged, already had "engendered substantial
reliance and ha[d] become part of the basic framework of a sizeable
industry"; adherence to settled precedent, the Court reasoned, advanced
the "stability and orderly development of the law," in keeping with
the underpinnings of the doctrine of stare decisis. Id. at 317, quoting Runyon v. McCrary, 427
U.S. 160, 190 (1976) (Stevens, J., concurring).
Additionally, overruling the bright-line rule "might raise thorny
questions concerning the retroactive application of . . . taxes and
might trigger substantial unanticipated liability." Quill, supra at 318 n.10.
Commissioner's response to Quill.
In response to the Court upholding the physical presence rule in Quill,
the commissioner revoked TIR 88-13; there was no authority, at that time,
permitting imposition of an obligation to collect and remit use taxes on
nondomiciliary sellers without a physical presence in the State. See TIR 96-8 (Oct. 16, 1996). Contemporaneous with the revocation, the
commissioner affirmed that he would enforce the definition of "engaged in
business in the commonwealth" contained in the 1988 amendment only
"to the extent allowed under constitutional limitations." Id.
Nevertheless, twenty-five years after
Quill was decided and with no Federal statute or Supreme Court decision
abrogating Quill or the physical presence bright-line test, the commissioner
adopted the regulation. 830 Code
Mass. Regs. § 64H.1.7. Not
surprisingly, the commissioner tied the scope of the regulation to the
then-existing Federal limitations on States' taxing authority as set forth in
Quill –‑ namely, the requirement of the bright-line physical presence rule. Specifically, the regulation provided:
Commerce Clause. The provisions of
[G. L. c. 64H, § 1,] are enforced to the extent allowed by the
'physical presence' dormant Commerce Clause standard as set forth in Quill
Corp. v. North Dakota, 504 U.S. 298 (1992), where a [S]tate sought to impose a
use tax collection duty on an out-of-[S]tate mail order vendor on sales of
tangible personal property shipped into the [S]tate. Unlike the mail order vendor at issue in
Quill, Internet vendors with a large volume of Massachusetts sales invariably
have one or more of the following contacts with the [S]tate that function to
facilitate or enhance such in-[S]tate sales and constitute the requisite in-[S]tate
physical presence . . . ."
830 Code Mass.
Regs. § 64H.1.7(1)(b)(2). The
regulation set forth the commissioner's view that nondomiciliary Internet
vendors with a certain threshold volume of sales to Massachusetts customers
"invariably have one or more" contacts with Massachusetts that, in
the commissioner's view, constituted in-State physical presence satisfying
Quill. These contacts included the use
of apps, cookies, and CDNs. See 830 Code
Mass. Regs. § 64H.1.7(1)(b)(2)(a)-(b).
Such contacts satisfied the physical presence rule, the commissioner
concluded, even though sending catalogs and taking and delivering orders via
the post office or common carrier did not.
See Quill, 504 U.S. at 317; Bellas Hess, 386 U.S. at 758.
Assuming that a nondomiciliary Internet
vendor had one or more of these contacts with the Commonwealth, the regulation
purported to impose on the vendor an obligation to collect and remit a use tax
for the period October 1, 2017, through December 31, 2017, if, during the
preceding twelve months, the vendor "had in excess of $500,000 in
Massachusetts sales from transactions completed over the Internet and made
sales resulting in a delivery into Massachusetts in [one hundred] or more
transactions." 830 Code Mass. Regs.
Abrogation of physical presence rule.
In 2018, after the regulation was adopted, the Supreme Court altered its
half-century course and overruled its decisions in Bellas Hess and Quill. Wayfair, 138 S. Ct. at 2099. In light of "far-reaching systemic and
structural changes in the economy," id. at 2097, quoting Direct Mktg.
Ass'n v. Brohl, 575 U.S. 1, 18 (2015) (Kennedy, J., concurring), physical
presence, the Court concluded, no longer was required to satisfy the "substantial
nexus" prong of the requisite four-prong commerce clause analysis,
Wayfair, supra at 2099. Instead,
"[s]uch a nexus is established when the taxpayer or collector avails
itself of the substantial privilege of carrying on business in that
jurisdiction" (alteration and quotation omitted). Id., quoting Polar Tankers, Inc. v. Valdez,
557 U.S. 1, 11 (2009).
After reviewing the dramatic developments
in the national economy resulting from the widespread use of the Internet for
commercial transactions, the Court disavowed the physical presence test,
reasoning that the test itself created market distortions exacerbated by the
Internet revolution, resulted in State budget shortfalls because it
prevented States from reaching commercial sales from many online vendors, and
had proved unworkable. Wayfair,
supra at 2097. "Each year, the
physical presence rule [became] further removed from economic reality and
result[ed] in significant revenue losses to the States." Id. at 2092.
Having abrogated the bright-light test for
the "substantial nexus" requirement, the Court declined to determine
that the State regulation at issue passed constitutional muster under the
remaining three prongs of the commerce clause framework; because the second and
third prongs had not been litigated, the Court remanded for consideration to
the State court for it to consider, in the first instance, "[t]he question
. . . whether some other principle in the Court's Commerce Clause
doctrine might invalidate" the State tax at issue. Id. at 2099.
The Court noted approvingly that the South
Dakota law at issue "include[d] several features that appear[ed] designed
to prevent discrimination against or undue burdens upon interstate
commerce." Id. Among them, the Court stated, the State law
at issue by its expressed terms did not apply retroactively and its application
had been stayed pending the decision by the Court whether to abrogate the
physical presence requirement. Id. at
As discussed supra, a coalition of States,
including Massachusetts, advocated for the Court to abrogate the physical
presence test. See Wayfair amicus brief, supra at 3, 18-21. They disputed that "the possibility of
retroactive tax liability constitute[d] a valid reason for maintaining the physical-presence
rule," id. at 3, because States either had "regulations or other
administrative guidance in place that [would] bar imposing collection
obligations on remote retailers that [fell] within Quill's ambit," id. at
19, or had "normal procedures for implementing regulatory changes -–
including advance notice -– [that would] provide adequate safeguards to abate
any surprise that might accompany a new Supreme Court rule," id. at
3. The States assured the Court that
retroactivity was not a concern because "[i]f South Dakota prevails here,
there is no reason to suspect that the amici States will deviate from their
normal administrative procedures –- including advance notice –- when
implementing this Court's new post-Quill precedent." Id. at 20.
The States represented that "other
legal and pragmatic safeguards" would prevent them from applying any new
rule retroactively. Id. at 19. "For one, many States have regulations
or other administrative guidance in place that bar imposing collection obligations
on remote retailers that currently fall within Quill's ambit." Id.
Additionally, States have "incentives to ensure that large-scale
regulatory changes are implemented carefully and fairly," id.; providing
ample notice of tax changes "benefits the States by giving them time to
prepare intake procedures, increasing taxpayers' compliance, and satisfying
potential State and [F]ederal due process requirements," id. at 20, citing
Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 100 (1993). The States represented that they were
"well equipped to structure their tax laws to both comply with due process
and avoid unconstitutional retrospective applications of new rules." Wayfair amicus brief, supra. Thus assured, the Court abrogated Quill. See Wayfair, 138 S. Ct. at 2099.
Notwithstanding the States'
representations to the Court, the commissioner asks us to construe the
regulation to incorporate the new Wayfair rule retroactively to permit him to
impose on nondomiciliary sellers the obligation to collect and remit a use tax
for periods prior to the Wayfair decision.
The regulation incorporates the Quill physical presence
requirement. There is no dispute that
U.S. Auto Parts used apps, cookies, and CDNs to facilitate its Massachusetts
sales during the tax period at issue; it also is undisputed that U.S. Auto
Parts's volume of Massachusetts sales over the Internet and deliveries to
Massachusetts customers satisfied the thresholds specified in the regulation. And the board noted that the parties agree
that, having forgone imposition of a use tax on nondomiciliary vendors for more
than thirty years following the Legislature's passage of the 1988 amendment,
the commissioner could not rely on the amendment's broad "engaged in business"
definition in the absence of the regulation.
U.S. Auto Parts Network, Inc. vs. Commissioner of Revenue, App. Tax Bd.
No. C339523, ATB 2021-385, 399 (Dec. 7, 2021).
Accordingly, the principal issue before the board was whether the
commissioner could by regulation impose a collection and remittance obligation
on U.S. Auto Parts where its only in-State contacts were its use of apps,
cookies, and CDNs.
The commissioner contends that the Court's
decision in Wayfair permits him to impose the obligations set forth in the
regulation to Internet vendors, like U.S. Auto Parts, so long as their sales
meet the thresholds set forth therein; he argues that whether or not the use of
apps, cookies, and CDNs constitutes a physical presence in the Commonwealth is
not relevant to the application of the regulation because the Court's decision
in Wayfair applies retroactively to permit him to saddle nondomiciliary vendors
with the regulation's obligations for tax periods preceding the Supreme Court's
decision in Wayfair. Relying on the
Court's statement in Harper, 509 U.S. at 97, that its decisions on issues of
Federal law "must be given full retroactive effect in all cases still open
on direct review and as to all events, regardless of whether such events
predate or postdate [the Court's] announcement of the rule," the
commissioner contends that the Wayfair standard applies to U.S. Auto Parts
because its case was pending when Wayfair issued. We disagree with the commissioner.
As set forth supra, the regulation, by its
own terms, limited its reach to nondomiciliary Internet vendors that satisfied
the physical presence test set forth in Quill.
The regulation specifically stated:
provisions of [G. L. c. 64H, § 1,] are enforced to the extent
allowed by the 'physical presence' dormant Commerce Clause standard as set
forth in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), where a [S]tate
sought to impose a use tax collection duty on an out-of-[S]tate mail order
vendor on sales of tangible personal property shipped into the [S]tate."
840 Code Mass.
Regs. § 64H.1.7(1)(b)(2). The
regulation then posited that, "[u]nlike the mail order vendor at issue in
Quill, Internet vendors with a large volume of Massachusetts sales invariably
have one or more of the following contacts [(e.g., the use of apps, cookies,
and CDNs)] with the [S]tate that function to facilitate or enhance such
in-[S]tate sales and constitute the requisite in-[S]tate physical
presence." Id. Thus, the regulation, by its own terms,
cabined its enforcement to the parameters of Quill, which in turn limited
States' ability to tax out-of-State sellers to only those with physical
presence within the State. See
Warcewicz, 410 Mass. at 550 ("we accord the words of a regulation their
usual and ordinary meaning").
The use of apps, cookies, and CDNs does not constitute physical
presence. Consequently, we find
ourselves embroiled in precisely the kind of "technical and arbitrary dispute
about what counts as physical presence" that the Supreme Court sought to
avoid in abrogating the now-defunct bright-line test. Wayfair, 138 S. Ct. at 2098. We thus turn to consider whether the use of
apps, cookies, and CDNs constitutes physical presence in Massachusetts under
We begin our analysis with the board's
conclusion that the use of apps, cookies, and CDNs does not constitute in-State
physical presence as required by the regulation. U.S. Auto Parts Network, Inc., App. Tax Bd.
No. C339523, ATB 2021 at 406-408. As set
forth in part 2.a, supra, "[w]e defer to the board's expertise with
respect to the interpretation of tax laws in the Commonwealth," VAS
Holdings, 489 Mass. at 674, so long as its construction is
"reasonable," Oracle USA, Inc., 487 Mass. at 522. See id. (in view of its expertise in administering
tax matters, "we give weight to [the board's] interpretation of tax
statutes [and regulations]" [citation omitted]).
In determining whether the board's
conclusion is reasonable, the Supreme Court's decisions in Quill and Wayfair
are instructive. In Quill, the Supreme
Court considered contacts similar to those at issue here. Specifically, the nondomiciliary seller in
Quill had licensed its computer software program to in-State consumers; the
software, like the apps at issue here, enabled consumers to check the seller's
inventories and prices and to place orders with the seller. Quill, 504 U.S. at 302 n.1. In addition, the seller retained title to
"a few floppy diskettes" that were present in the taxing State. Id. at 315 n.8. The Court held that, while licensed software
and diskettes might constitute "some minimal nexus," id., such a
slight presence did "not comprise the 'substantial nexus' required by the
Commerce Clause," id. at 302 n.1.
In Wayfair, 138 S. Ct. at 2095, the
Supreme Court specifically referenced the use of modern technologies (such as,
the use of apps, cookies, and CDNs) by remote sellers; far from concluding that
such technologies constituted the required physical presence under Quill's
bright-line test, the Court identified the ambiguity as to whether such
technologies would satisfy the physical presence rule as a reason for
abrogating the rule.
Indeed, the Court strongly suggested that
such contacts would not constitute the requisite physical presence in the
taxing State. The Court stated that it
is an "inescapable fact of modern commercial life that a substantial
amount of business is transacted with no need for physical presence within a
State in which business is conducted" (alterations omitted). Wayfair, supra at 2093, quoting Quill, 504
U.S. at 308. This is because remote
sellers can employ apps, cookies, and CDNs that permit them to conduct such
business. The Court recognized that, in
the context of "the modern economy with its Internet technology" in
which remote sellers can employ apps, cookies, and CDNs, the physical presence
rule resulted in the anomaly of "a business with one salesperson in each
State [needing to] collect sales taxes in every jurisdiction in which goods are
delivered . . . but a business with 500 salespersons in one central
location and a website accessible in every State [not needing to] collect sales
taxes on otherwise identical nationwide sales." Wayfair, supra.
The Court also lamented that the physical
presence rule "treats economically identical actors differently, and for
arbitrary reasons." Id. at
2094. In support of this conclusion, the
Court relied on the example of two businesses that sell furniture online. Id.
The first vendor "stocks a few items of inventory in a small
warehouse" in the taxing State; under the physical presence rule, it would
have to collect and remit a use tax on all of its sales, even those having
nothing to do with the goods in the warehouse.
Id. The second vendor
"maintains a sophisticated website with a virtual showroom accessible in
every State"; yet, under the physical presence rule, it escapes the use
tax on the sale of the same goods despite its "pervasive Internet
In explaining the unsuitability of the
physical presence rule for modern commerce, the Court noted:
"[I]t is not
clear why a single employee or a single warehouse should create a substantial
nexus while 'physical' aspects of pervasive modern technology should not. For example, a company with a website
accessible in South Dakota may be said to have a physical presence in the State
via the customers' computers. A website
may leave cookies saved to the customers' hard drives, or customers may
download the company's app onto their phones. . . . Between targeted advertising and instant
access to most customers via any internet-enabled device, 'a business may be
present in a State in a meaningful way without' that presence 'being physical
in the traditional sense of the term.'"
Id. at 2095,
quoting Direct Mktg. Ass'n, 575 U.S. at 18 (Kennedy, J., concurring). "[T]he continuous and pervasive virtual
presence of retailers today is, under Quill, simply irrelevant. This Court should not maintain a rule that
ignores these substantial virtual connections to the State." Wayfair, supra. The Court's analysis, leading it to abrogate
the physical presence rule, suggests its view that any "physical
aspects" of technologies such as the use of apps, cookies, and CDNs would
not satisfy the Quill standard.
In fact, the Court presaged that States'
efforts to "defin[e] physical presence in the Cyber Age,"
highlighting Massachusetts's regulation, id. at 2097, citing 830 Code Mass.
Regs. § 64H.1.7, would lead to "arbitrary disputes about what counts
as physical presence," Wayfair, supra at 2098. To the extent that the Court wavered on the
issue whether the "'physical' aspects of pervasive modern
technology," like the use of apps, cookies, and CDNs, were sufficient
physical contact under Quill, the board correctly resolved the ambiguity in
favor of the taxpayer. See Oracle USA,
Inc., 487 Mass. at 522, quoting Citrix Sys., Inc. v. Commissioner of Revenue,
484 Mass. 87, 92 (2020) ("Tax statutes are strictly construed, with
ambiguity resolved in favor of the taxpayer"); Dental Serv. of Mass., Inc.
v. Commissioner of Revenue, 479 Mass. 304, 310 (2018) ("we construe the
use of 'covered persons' in [G. L. c. 176I, § 11,] 'strictly
against the taxing authority' if the statute is ambiguous" [citation
omitted]). See also Gould v. Gould, 245
U.S. 151, 153 (1917) ("In the interpretation of statutes levying taxes it
is the established rule not to extend their provisions, by implication, beyond
the clear import of the language used, or to enlarge their operations so as to
embrace matters not specifically pointed out.
In case of doubt[s,] they are construed most strongly against the
Government, and in favor of the citizen"); Lowell Sun Publ. Co. v.
Commissioner of Revenue, 397 Mass. 650, 654 (1986) ("the 1982 [tax]
regulations are hardly entitled to the deference we may grant an agency's
interpretations of its own enabling statutes"). Cf. D & H Distrib. Co. v. Commissioner of
Revenue, 477 Mass. 538, 545 (2017) ("In the absence of supporting evidence
for a tax assessment, a taxpayer will be entitled to an abatement").,
Accordingly, we defer to the board's
reasonable conclusion that the use of apps, cookies, and CDNs does not
constitute in-State physical presence as required by the regulation.
Decision of the
acknowledge the amicus briefs submitted by the National Taxpayers Union
Foundation, the New England Legal Foundation, and PioneerLegal, LLC.
 U.S. Auto
Parts's competitors included auto parts retailers (like Advance Auto Parts,
AutoZone, and NAPA Auto Parts), local independent retailers, and online
retailers like Amazon.com.
 An app
"is a program that facilitates performance of a task or retrieval of
information"; it is "a data add-on for technology devices,"
commonly "handheld devices."
Bell & Hughes, One Bad App Spoils the Bunch: Brand Protection in the App Era, 74 Tex. B.J.
218, 219 (Mar. 2011). Apps are,
according to the commissioner's expert, "composed of bits -- electrons
stored in charge traps on a silicon substrate" and "generally persist
on a device until affirmatively and intentionally manually deleted." They can store data on the mobile device with
the expressed or implicit permission granted by a user "when downloading
and installing the app." The board
found that "[t]he U.S. Auto Parts' apps were available for portable
devices using either the iOS or Android operating systems" and that
"[c]ustomers, including Massachusetts customers, could download U.S. Auto
Parts apps from anywhere in the United States for use anywhere in the United
 U.S. Auto
Parts sold its products through three primary websites -- www.carparts.com,
www.jcwhitney.com, and www.autopartswarehouse.com -- as well as secondary
websites (collectively, U.S. Auto Parts's websites), and through the apps for
the JC Whitney and Auto Parts Warehouse websites.
 See Annot.,
Claims Concerning Use of "Cookies" to Acquire Internet Users' Web
Browsing Data Under Federal Law, 36 A.L.R. Fed. 3d, art. 5, § 2 (2018).
 According to
the commissioner's expert, "[t]he term 'cookie' is used in computer
science to mean a piece of data (up to [four] kilobytes) that a computer
receives at the time a website visitor downloads a web page from a web server,
and automatically stores in [the computer's] long-term memory or 'hard
drive.'" Cookies are comprised
"of specific sequences of electric or magnetic charges, which humans have
by convention agreed to interpret as alphanumeric characters based on character
encoding schemes." "A cookie
is held in a computer's hard drive by way of electrons stored in charge traps
on a silicon substrate (on solid state hard drives), or magnetic charges stored
in the magnetic alloy coating of a disk (on magnetic disk hard
drives)." The "electric or
magnetic charges persist on a computer's hard drive, even if the computer is
not connected to any power source."
are text files containing . . . information about the user, such as
the user's browsing history."
Comment, Sharing More Than You Thought:
Facebook Cannot Assert the Party Exception to Avoid Liability Under the
Wiretap Act, 62 B.C. L. Rev. E. Supp. II-205, II-210 (2021). "A cookie text file stores content such
as social media logins and passwords or online shopping data and saves
information for when users visit the websites." Id. at II-210 n.24.
 Cookies are
placed either by the web page's host server ("'[f]irst party' cookies")
or by "a different server than the one requested by the user, typically an
unrelated advertiser or data processing provider, which gains access to a
website visitor's computer through arrangements with the requested website's
owner" ("'[t]hird party' cookies"). U.S. Auto Parts used both first party and
third party cookies.
 "A CDN
is an infrastructure placed on top of the Internet that pushes content close to
users." Lin, Internet
Jurisdiction: Using Content Delivery
Networks to Ascertain Intention, 24 Va. J.L. & Tech. 1, 24 (2020). "It is a large distributed system of
multiple servers deployed all over the world, sometimes called edge or cache
servers." Id. "A CDN allows people and businesses
. . . to deliver content faster and more reliably to target
locations." Id. at 25. Specifically, a CDN "accelerates the
delivery of websites and applications by caching content, . . . which
means it stores replicas of text, images, audio, and videos so that when a user
requests certain data, that request can be served by a nearby server rather
than a far-off origin server."
Id. See Narechania, Network
Nepotism and the Market for Content Delivery, 67 Stan. L. Rev. Online 27
(2014), for a discussion of the CDN market.
 The department
sent similar letters to 282 other Internet retailers.
 During the
relevant tax period, MassTaxConnect was a free web-based application through
which taxpayers could file tax returns and forms and make payments. After a vendor registered and provided its
sales information, including exempt sales, MassTaxConnect would perform
calculations to determine the amount of sales and use taxes to be paid. The vendor could then file returns and make
payments directly through the application.
 The due
process clause prohibits the taking of property without due process of
law. Fourteenth Amendment to the United
States Constitution, § 1. As it
pertains to States' taxing authority, due process centrally concerns the
fundamental fairness of the proposed taxing activity; it focuses on whether a
taxpayer's connections with the taxing State are substantial enough to
legitimate the State's exercise of power over it. See VAS Holdings, 489 Mass. at 675, quoting
MeadWestvaco Corp. ex rel. Mead Corp. v. Illinois Dep't of Revenue, 553 U.S.
16, 24-25 (2008) (broad inquiry is "whether the [S]tate has given anything
for which it can ask return"). On
appeal, U.S. Auto Parts contends that retroactive application of the regulation
would raise due process concerns. We
need not reach this argument in view of our resolution infra.
 Prior to the
regulation, the commissioner attempted to impose an obligation to collect and
remit a use tax on nondomiciliary sellers through an administrative directive
with substantially the same provisions as the regulation. See Department of Revenue Directive 17-1
(Apr. 3, 2017). The directive
distinguished the "business and activities of Internet vendors" from
those of the mail order vendors analyzed in Quill because "Internet
vendors do not limit their contacts with the state to mail and common
carrier." Id. at
§ IV(b)(ii)(B). Two national retail
trade associations sought to enjoin enforcement of the directive on
constitutional, statutory, and administrative procedural grounds. American Catalog Mailers Ass'n vs. Heffernan,
Mass. Super. Ct., No. 2017-CV-1772 BLS1 (Suffolk County June 28, 2017). The injunction was granted on administrative
procedural grounds in June 2017.
Id. The commissioner then revoked
the directive. See Department of Revenue
Directive 17-2 (June 28, 2017).
 In the
department's "Notice of Public Hearing" on the proposed regulation in
the Massachusetts Register, the department also tied the proposed regulation to
Quill. Specifically, the notice stated:
that is engaged in making taxable sales in the [C]ommonwealth or that sells
taxable tangible personal property or services or a combination of both for use
in the [C]ommonwealth is subject to a sales or use tax collection duty when it
is 'engaged in business in the [C]ommonwealth' within the meaning of
[G. L. c. 64H, § 1,] and it meets the constitutional
requirements as discussed in Quill Corp. v. North Dakota, 504 U.S. 298 (1992). The provisions of [G. L. c. 64H,
§ 1,] are to be 'enforced to the extent allowed under the constitutional
1344 Mass. Reg.
37-39 (July 28, 2017).
 The regulation specified one other category of contacts constituting
physical presence: "contracts
and/or other relationships with online marketplace facilitators and/or delivery
companies resulting in in-[S]tate services including, but not limited to,
payment processing and order fulfillment, order management, return processing
or otherwise assisting with returns and exchanges, the preparation of sales
reports or other analytics and consumer access to customer service." 830 Code Mass. Regs.
§ 64H.1.7(1)(b)(2)(c). The parties
agreed that "U.S. Auto Parts had no contracts or other relationships with
Internet marketplace facilitators or delivery companies resulting in in-[S]tate
services performed in Massachusetts."
Accordingly, we limit our analysis to whether the use of apps, cookies,
and CDNs constitutes the requisite physical presence.
Internet vendors would be required to "register, collect and remit"
the taxes "[f]or each calendar year beginning with 2018, if during the
preceding calendar year [the Internet vendor] had in excess of $500,000 in
Massachusetts sales from transactions completed over the Internet and made
sales resulting in a delivery into Massachusetts in [one hundred] or more
transactions." 830 Code Mass. Regs.
 As discussed in part 2.b.ii, supra, in addition to the substantial nexus
prong, the commerce clause requires State tax laws to be fairly apportioned,
nondiscriminatory against interstate commerce, and fairly related to the
services the State provides. See Complete
Auto Transit, Inc., 430 U.S. at 279.
 The Supreme
Court explained that "[i]n effect, Quill has come to serve as a judicially
created tax shelter for businesses that decide to limit their physical presence
and still sell their goods and services to a State's consumers -- something
that has become easier and more prevalent as technology has
advanced." Wayfair, 138 S. Ct. at
2094. "If the Commerce Clause was
intended to put businesses on an even playing field, the [physical presence]
rule is hardly a way to achieve that goal," id., quoting Quill, 504 U.S.
at 329 (White, J., concurring in part), because "Quill puts both local
businesses and many interstate businesses with physical presence at a
competitive disadvantage relative to remote sellers," Wayfair, supra. "[I]t is certainly not the purpose of
the Commerce Clause to permit the Judiciary to create market
 See Wayfair,
138 S. Ct. at 2093, quoting Quill, 504 U.S. at 308 ("it is an inescapable
fact of modern commercial life that a substantial amount of business is
transacted with no need for physical presence within a State in which business
is conducted" [alterations omitted]); Wayfair, supra at 2097 ("The
Quill Court did not have before it the present realities of the interstate
marketplace. . . . The
Internet's prevalence and power have changed the dynamics of the national
 The features
were (1) the act's "safe harbor to those who transact only limited
business in South Dakota"; (2) the provision ensuring that no obligation
to remit the tax would be applied retroactively; and (3) South Dakota's
adoption of the Streamlined Sales and Use Tax Agreement. Wayfair, 138 S. Ct. at 2099. The Streamlined Sales and Use Tax Agreement
"standardizes taxes to reduce administrative and compliance costs" by
"requir[ing] a single, [S]tate level tax administration, uniform
definitions of products and services, simplified tax rate structures, and other
uniform rules." Id. at 2100. Additionally, it "provides sellers
access to sales tax administration software paid for by the State." Id.
 After the
Wayfair decision, the Legislature superseded the regulations by statute, see
St. 2019, c. 41, §§ 31-35, 106 (amending G. L. cc. 64H and 64I),
and the commissioner issued a new regulation, see 830 Code Mass. Regs.
§ 64H.1.9 (2019). Pursuant to both the statute and the new
regulation, remote retailers who are engaged in business in the Commonwealth
using means including, inter alia, brick-and-mortar locations, catalogs,
newspaper advertising, and computer networks, are required to collect and remit
use taxes. See Internet Tax Freedom Act,
47 U.S.C. § 151 note (requiring same tax treatment of Internet and
brick-and-mortar stores). See also
G. L. c. 64H, § 1, as amended by St. 2019, c. 41, § 31 (defining
"[e]ngaged in business in the commonwealth" to include, inter alia,
"exploiting the retail sales market within the commonwealth through
. . . catalogs or other solicitation materials sent through the
mails," or "computer networks or in any other communications medium,
including through the means of an Internet website, software or cookies
distributed or otherwise placed on customers' computers or other communications
devices, or a downloaded application"); 830 Code Mass. Regs.
§ 64H.1.9(1)-(3) (2019) ("engaged in business in the
Commonwealth" will be "construed to impose a collection duty to the
fullest extent permitted by the U.S. Constitution and [F]ederal law," so
that use of apps, cookies, CDNs, catalogs, billboards, or newspaper
advertising, etc., will be considered contacts triggering use tax collection
and remittance obligations).
 In D & H
Distrib. Co. v. Commissioner of Revenue, 477 Mass. 538, 540 (2017), we also
suggested that nondomiciliary sellers, presumably using technologies such as
apps, cookies, and CDNs to reach Massachusetts customers, would not satisfy
Quill's physical presence requirement.
We stated that, "[i]n light of the Supreme Court's physical
presence requirement," in Quill, "if [an] out-of-State retailer of
[an item] purchased online by [a] Massachusetts consumer had no physical
business presence [in the State], it could not be compelled to collect
Massachusetts sales tax." Id.
 Because the
contacts identified in the regulation do not constitute physical presence under
Quill, discovery into the extent of U.S. Auto Parts's placement of apps and
cookies on Massachusetts customers' devices or the number of CDNs located in
Massachusetts is unnecessary. The cases that
the commissioner cites for the proposition that "physical presence"
is a "term of art" requiring "a highly fact-driven inquiry"
do not involve the virtual contacts at issue here. See Scholastic Book Clubs, Inc. v.
Commissioner of Revenue Servs., 304 Conn. 204, 232-234, cert. denied, 568 U.S.
940 (2012); Scholastic Book Clubs, Inc. v. Farr, 373 S.W.3d 558, 564 (Tenn. Ct.
App.), cert. denied, 528 U.S. 1028 (2012).
 The parties
do not cite, nor are we aware of, any cases in our sister jurisdictions
analyzing whether the use of apps, cookies, or CDNs constitutes physical
presence under Quill. See, e.g.,
Overstock.com, Inc. v. New York State Dep't of Taxation & Fin., 20 N.Y.3d
586, 597, cert. denied, 571 U.S. 1071 (2013) (relying on presence of in-State
agent to conclude commerce clause does not bar New York's click-through nexus
law); America Online, Inc. vs. Johnson, No. M2001-00927-COA-R3-CV (Tenn.
Ct. App. July 30, 2002) (same).
Where sellers have not had agents in the
taxing State, tax authorities in other jurisdictions have concluded that a
nondomiciliary seller's use of another company's in-State servers to store and
manipulate data, without more, is not enough to satisfy the physical presence
requirement. See, e.g., Missouri
Department of Revenue, Private Letter Ruling No. LR3819 (Apr. 11, 2007)
(declining to find nexus when out-of-State company's only connection with
Missouri was "data storage, data manipulation, or data processing at
facilities within Missouri"); Texas Comptroller of Public Accounts, Policy
Letter Ruling No. 201107220L (July 1, 2011) ("if the out-of-[S]tate
company purchases Internet hosting services from an unrelated seller located in
Texas who provides the service by use of servers that the seller owns or leases
in Texas, and that is the only contact the out-of-[S]tate company has with
Texas, no nexus is created"); Virginia Department of Taxation, Ruling of
the Tax Commissioner No. 12-36 (Mar. 28, 2012) (suggesting that presence of
company's "several [in-State] Internet servers" "would appear to
create nexus" for State corporate income tax purposes); Virginia
Department of Taxation, Ruling of the Tax Commissioner No. 00-53 (Apr. 14,
2000) (concluding that no nexus exists to tax nondomiciliary online auto parts
retailer that contracts with in-State web hosting company, which
"provide[s] power and bandwidth connections [and] other web hosting
services, and Internet servers").