Mass. Dep't of Revenue v. Valley Media, Inc., 338 B.R. 605 (2006)

This case arises as result of a series of transactions between a wholesale distributor of music and video products, the Debtor and various Internet retailers, who in turn sold the Debtor’s products to customers in Massachusetts and instructed the Debtor to ship the products to the customers in Massachusetts. The Massachusetts Department of Revenue claimed sales tax on these transactions from the Debtor. The Bankruptcy court denied the department’s claim holding that the Debtor was not responsible for the payment of sales tax on the drop shipment transactions between the Debtor and the Internet retailers. The district court affirmed the Bankruptcy court’s order.

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