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

Marketplace Facilitator Tax Responsibility

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?
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Featured Authors

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Chief Tax Officer, Transaction Tax

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being Senior Director – Tax Counsel. Michael led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. Michael has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

George L. Salis, Principal Economist and Tax Policy Advisor at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

George L. Salis

Chief Economist and Senior Tax Policy Director

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George L. Salis is Chief Economist and Senior Tax Policy Director. He is an economist, lawyer, and tax professional with 29+ years’ experience in international taxation and trade compliance, tax planning and controversy, fiscal regulation, and tax economics consulting. He is responsible for analysis of economic, fiscal, legal, trade, and development issues in countries, as well as tracking and analyzing the rapid change in tax policies and regulations, and inter-governmental organizations, and tax administrations around the world.

George is the recipient of the Advanced Certificate in EU Law from the Academy of European Law, European University Institute in Florence, and the Executive Certificate in Economic Development from the Harvard Kennedy School of Government.

George received his BSc in economics and political science, an LLB (Honours), an MA in legal and ethical studies, and an LLM (Honours) in international tax law. He also holds the PhD in international law and economic policy, and the SJD in Taxation from The University of Florida, Levin College of Law. George is a Certified Business Economist (CBE- NABE).

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