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I am based in MA and sell to other states. I have a new NJ client. The P.O. and billing come from NJ but they want delivery to MA. Is order subject to MA tax?

Full Question: I have a physical location in Massachusetts and sell to other states where they accrue tax and submit use tax to their own State. However, I am looking to sell to another client with offices in NJ and the purchase order and billing come from NJ but they want to me to deliver it to a sales rep in Massachusetts. Would that order be subject to Mass tax even though I am still sending all bills to NJ and being paid by NJ.

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Answer:

Diane Yetter photoThe determination of which state to charge and collect sales tax is dependent on the ship to state. It is irrelevant where the purchase order comes from or where you send the invoice to. Therefore, based on your facts, you are shipping to Massachusetts where you are also located. Since you clearly have nexus in Massachusetts you are required to bill your New Jersey customer Massachusetts tax on this order shipped to Massachusetts unless they can provide you with a valid exemption documentation for Massachusetts. If your New Jersey customer is reselling the items you are selling to them, the only acceptable documentation is a Massachusetts resale certificate with a Massachusetts resale number.

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