The Potential Tax Impact of an ‘Unprecedented’ Product Liability Ruling

In this Tax Notes State article, Vertex Chief Tax Officer Michael Bernard and Principal Economist and Tax Policy Advisor George Salis discuss Bolger v. Amazon and its potentially far-reaching implications on marketplace transactions.

In its September petition to the California Supreme Court, Amazon used vivid language
(“unprecedented leap”) to challenge a landmark product liability ruling of Bolger v. Amazon, whose “blast radius” would send disruptions rippling throughout the retail industry, affecting marketplace facilitators in particular.

These colorful terms should capture the attention of tax executives, who have compelling reasons to monitor Bolger and similar court cases and related legislative efforts that could ultimately lead to a burst of tax policy changes concerning e-commerce platforms.

Tax professionals should:

  1. familiarize themselves with the case; 
  2. assess its potentially far-reaching implications on marketplace transactions and the master service agreements that govern them; and
  3. consider how a transformational shift in product liability applicability raises the stakes on tax compliance risks at a time when post-Wayfair sales tax changes targeting marketplace facilitators and online transactions more broadly are multiplying.

In this article, Michael and George address the following questions and more:

  • What were the prior rulings in Bolger v. Amazon?
  • Why does the case matter to tax?
  • What are the potential consequences of the decision?

Featured Authors

Sales & Use Tax Resources

Our industry influencers weigh in on the latest trends and regulations related to sales and use tax.

Learn More