Oracle USA, Inc. v. Commissioner of RevenueAnnotate this Case
The Supreme Judicial Court affirmed the decision of the Appellate Tax Board granting certain vendors' applications for refunds through the general abatement process for the portion of sales tax they had paid to the Commonwealth that was attributable to out-of-state use of software, holding that Mass. Gen. Laws ch. 64H, 1 creates a statutory right to apportionment for software transferred for use in multiple states.
The vendors in this case sold or licensed software to Hologic, Inc., a medical device company headquartered in Massachusetts. At the time sales taxes were due, the vendors remitted tax payments to the Commonwealth based on the entire value of the transactions. When the vendors were informed that only a portion of the software was to be used in the Commonwealth, they applied for refunds. The Commissioner of Revenue denied the applications for abatement on the grounds that the regulations for apportionment were not followed. The Board granted the requested abatements. The Supreme Judicial Court affirmed, holding (1) the vendors had a statutory right to apportionment; and (2) the general abatement process was available to the vendors, despite their having paid sales tax in excess of that properly apportioned to sales in the Commonwealth.