Maryland Goes After Sales Tax
The case hinged on a decision by Anne Arundel County (Md.) Circuit Court Judge Ronald A. Silkworth that Royal Transport of Jamestown, N.C., was an agent of Furnitureland South and not a common carrier. Previous legal rulings had held that companies were exempt from state sales tax provisions if they had no facilities in Maryland and used “common carriers” and not their own trucks for delivery.
The case is part of a larger effort by Maryland to collect an estimated $50 million in sales tax revenue lost to catalog sales and out-of-state and online purchases. Other parts of the initiative include checking truck manifests to make sure customers are paying sales taxes owed to the state.
Furnitureland’s Maryland sales were close to $3.5 million in 1997, but none of the company’s Maryland customers paid the state’s 5% sales tax. The furniture dealer claimed it is an out-of-state company that uses Royal, a private trucking company, to deliver its product and so is legally absolved from collecting Maryland tax.
Furthermore, the state said, Furnitureland plans most of the trucks’ routes and Royal drivers frequently assemble furniture and collect money from customers for purchases.
Judge Silkworth decided Aug. 13 that because of Furnitureland and Royal’s “calculated and systematic exploitation of the Maryland furniture consumer market,” the companies ought to pay the state sales tax.
For the full story, see the Aug. 30 print edition of Transport Topics. Subscribe today.
