Not the Sweet Kind of “Cookies”: The New Tax on Vendors Making Internet Sales

Weddings Are (Still) Not An “Agricultural Operation”

“Social Media Use by Municipalities: Developing and Enforcing Policies” Webinar Scheduled for February 14


Sure, it’s the holiday season, but these cookies aren’t the heart-shaped kind that you give your Valentine. These “cookies” are packets of data that businesses rely on to operate their websites. Cookies allow businesses to identify and track users, then customize those users’ web experiences. For the non tech-savvy among us, the concept is best understood by reference to the old Hansel and Gretel story: cookies are the bread crumbs that businesses can use to follow your trail and recognize you when you land back on their home page.

Why should cookies matter to you? Well, if you own a business and your website uses cookies, you may be subject to recent tax regulations issued by Massachusetts, and similar regulations that are under way in Connecticut. In the most basic terms, if your business’ home base is outside of Massachusetts, and you don’t already pay sales or use tax in the state, look at your Massachusetts revenue and deliveries. If you’ve made half a million dollars’ worth of sales over the Internet to customers in Massachusetts, and made 100 or more deliveries into the state, your business may be subject to tax. Connecticut’s Commissioner of Revenue has indicated that his state will take a similar path in early 2018, potentially with a lower threshold of $300,000 in sales over the Internet for out-of-state businesses.

What’s interesting is that an Internet vendor’s use of cookies is a key part of the justification for the new regulation in Massachusetts. In the state’s view, cookies, along with other in-state software and ancillary data, constitute a vendor’s “physical” presence in Massachusetts. The regulation specifically notes that cookies are “distributed to or stored on the computers or other physical communications devices of a vendor’s in-state customers, and may enable the vendor’s use of such physical device.”

By staking their claim to taxes on out-of-state businesses’ Internet sales, Massachusetts is betting that the United States Supreme Court will take a fresh look at the law it laid down in Quill Corp. v. North Dakota, 504 U.S. 298 (1992). In that case, the Supreme Court held that an out-of-state mail-order business was not subject to North Dakota’s use tax merely by soliciting sales and delivering goods in the state. While the business in Quill had no physical presence in North Dakota, Massachusetts declares that Internet vendors do have such a presence by virtue of—among other things—the software and data used by in-state consumers.

Are “cookies” so different from catalogs that the Supreme Court will overturn Quill and allow states to tax out-of-state businesses making sales over the Internet? Whether this new regulatory framework will survive a constitutional challenge remains to be seen. What is certain, however, is that businesses must stay informed in a rapidly-changing tax landscape and be prepared for new taxes on Internet sales, as other states follow the lead of Massachusetts and Connecticut. To learn more about this issue or for information on other business matters important to your organization, contact Attorney Samantha M. Vasques at 401-824-5100 or email

[back to top]


The Rhode Island Supreme Court recently had the opportunity to review a 2014 amendment to the Right to Farm Act (the “RFA”) in The Gerald P. Zarrella Trust et al. v. Town of Exeter et al., SU #2016-301-A. In that matter, the plaintiff sought a declaration that RFA, as amended, permitted them to host commercial events, including weddings for a fee, on their farmland. Specifically, the plaintiff had previously been enjoined from holding such activities, but argued that a 2014 amendment to the RFA superseded the injunction.

The RFA represents a legislative determination to preserve and protect remaining agricultural operations. The 2014 amendment provided that:

'agricultural operations’ includes any commercial enterprise that has as its primary purpose horticulture, viticulture, viniculture, floriculture, forestry, stabling of horses, dairy farming, or aquaculture, or the raising of livestock, including for the production of fiber, furbearing animals, poultry, or bees, and all such other operations, uses, and activities as the director, in consultation with the chief of division of agriculture, may determine to be agriculture, or an agricultural activity, use or operation. The mixed-use of farms and farmlands for other forms of enterprise including, but not limited to, the display of antique vehicles and equipment, retail sales, tours, classes, petting, feeding and viewing of animals, hay rides, crop mazes, festivals and other special events are hereby recognized as a valuable and viable means of contributing to the preservation of agriculture.

The Court decided that while the first sentence of the amendment provided definitional guidance as to what constitutes “agricultural operations,” the second sentence merely provided “a list of encouraged activities that the General Assembly has deemed ‘valuable and viable’ with respect to ‘contributing to the preservation of agriculture.’” Thus, the Court determined that the listed activities were “nonagricultural operations” and subject to local town control.

Accordingly, while many of the listed activities in the second sentence of the 2014 amendment may contribute to the long term success of a farm (which would further effectuate the purpose of the RFA), this does not mean that those activities may be conducted as a right regardless of local ordinances, such as zoning restrictions. If a farm is located in a district that is not properly zoned for such activities, then the landowner will need to apply for relief from the local zoning board. Only with such relief will a farm owner be able to offer the activities listed, such as hosting a wedding for a fee. For further information about this issue or other business matters, contact Attorney Patrick J. McBurney at 401-824-5100 or email

[back to top]


No organization is immune from the perils and consequences of social media use in the workplace – including municipalities. These entities also have additional challenges and legal issues that need to be considered by government officials to ensure compliance in the social and digital media space.

To that end, PLDO Partner and prominent business and employment lawyer and litigator, Brian J. Lamoureux, who is a national voice and legal scholar on social and digital media, will present a live webinar on Wednesday, February 14, 2018 from 1:00 p.m. to 2:30 p.m. (EST) entitled "Social Media Use by Municipalities: Developing and Enforcing Policies for Public Employees and Officials." His presentation will cover unique legal issues for municipal leaders with special emphasis on First Amendment issues, municipal employee discipline, and creating effective social media policies. He will also provide best practices to consider when developing and enforcing social media policies for municipal employees and his insight into evolving trends in the social media space. Although the webinar focuses on government officials, the content is also informative to private sector business owners and their leadership staff.

For information and to register, please visit Social Media Use by Municipalities Webinar. If you are unable to attend the webinar and would like to speak with Attorney Lamoureux about your organization’s social and digital media policies, please call 401-824-5100 or email

[back to top]

Corporate & Business Overview

Pannone Lopes Devereaux & O’Gara LLC
Northwoods Office Park
1301 Atwood Avenue, Suite 215 N Johnston, RI 02919

Please subscribe me to this Newsletter

Thank you for reading our newsletter. For further information about the firm and the Corporate & Business and Health Care Teams, please visit our website at or contact PLDO Managing Principal Gary R. Pannone at or 401-824-5100. We welcome your inquiry and appreciate your feedback. If you feel you have received this email in error, or would no longer like to receive this newsletter, please click here to unsubscribe. Thank you.

Attorney Advertising