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SJC-12260

   D & H DISTRIBUTING COMPANY    vs.   COMMISSIONER OF REVENUE.



            Suffolk.    April 3, 2017. - July 31, 2017.

    Present:   Gants, C.J., Lenk, Hines, Gaziano, Lowy, Budd,
                           & Cypher, JJ.


Taxation, Sales and use tax. Internet. Constitutional Law,
     Commerce clause, Interstate commerce, Taxation. Interstate
     Commerce.



    Appeal from a decision of the Appellate Tax Board.

     The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.


     Philip S. Olsen (Jonathan A. Block also present) for the
taxpayer.
     Julie E. Green, Assistant Attorney General, for
Commissioner of Revenue.


    CYPHER, J.    If a consumer enters his or her neighborhood

sporting goods store in Massachusetts and purchases a baseball

glove, the store, as the "vendor," collects the Massachusetts

sales tax owed from the consumer and remits it to the Department

of Revenue (department).   See G. L. c. 64H, §§ 1, 2.   This case
                                                                        2


evaluates a more complex transaction in which a Massachusetts

consumer instead finds a hypothetical baseball glove online, and

purchases it from an out-of-State retailer who then orders the

glove from a Massachusetts wholesaler and directs the wholesaler

to deliver the glove directly to the doorstep of the

Massachusetts consumer.    In that more complicated transaction,

known as a "drop shipment sale," the wholesaler is considered to

be the vendor, and is obligated to collect sales tax and remit

it to the department.

       The taxpayer, D & H Distributing Company (D & H), is a

company in the position of the hypothetical wholesaler just

described.    It appeals from a decision of the Appellate Tax

Board (board) in which the board concluded that under a

provision of the Massachusetts sales tax statute known as the

"drop shipment rule," D & H was responsible for collecting and

remitting the sales tax due on products it sold to the out-of-

State retailers and then delivered to consumers.        G. L. c. 64H,

§ 1.    We agree with the board's conclusion, and also reject

D & H's argument that the statutory drop shipment rule violates

the dormant commerce clause of the United States Constitution.

Accordingly, we affirm the decision of the board.

       1.   Statutory framework.   a.   Sales tax.   General Laws

c. 64H distinguishes between retail sales transactions and

sales-for-resale transactions.     Retail sales of goods and
                                                                      3


services are subject to tax in Massachusetts.     G. L. c. 64H,

§ 2.    In contrast, sales for resale -- that is, sales of goods

by a wholesale supplier to a retailer that will ultimately sell

to an end consumer -- are not subject to tax; only the

subsequent retail sale is.      See G. L. c. 64H, § 1 (defining

"retail sale" as "a sale of services or tangible personal

property or both for any purpose other than resale"); G. L. c.

64H, § 2 (imposing sales tax upon "sales at retail").

       The statute also distinguishes between a retailer that is

engaged in business in Massachusetts and one that is not.         Where

a retailer is engaged in business in Massachusetts but purchases

the goods it sells a Massachusetts consumer from a wholesaler,

sales tax is charged on the final sale to the customer, and the

retailer is the "vendor," G. L. c. 64H, § 1, responsible to pay

the tax.   G. L. c. 64H, § 2.    However, if a retailer is not

engaged in business in Massachusetts in the sense that the

retailer does not have any in-State physical presence,

Massachusetts cannot require the retailer to collect and remit

sales tax.   See Quill Corp. v. North Dakota, 504 U.S. 298, 314-

315 (1992) (retailers without in-State physical presence may not

be compelled to collect State sales tax); National Bellas Hess,

Inc. v. Department of Revenue of Ill., 386 U.S. 753, 758 (1967)
                                                                       4


(same).1    In light of the Supreme Court's physical presence

requirement, in the previously described hypothetical, if the

out-of-State retailer of the baseball glove purchased online by

the Massachusetts consumer had no physical business presence

here, it could not be compelled to collect Massachusetts sales

tax.

       b.   Use tax.   The use tax, under G. L. c. 64I, was designed

to prevent loss of sales tax revenue from such out-of-State

retail purchases.      Commissioner of Revenue v. J.C. Penney Co.,

431 Mass. 684, 687 (2000).     The use tax obligates consumers to

remit tax to the Commissioner of Revenue (commissioner) "upon

the storage, use or other consumption in the commonwealth of

tangible personal property or services purchased from any

vendor," G. L. c. 64I, § 2, that was not subject to sales tax

upon the original sale.     G. L. c. 64I, § 3.   In practice,

however, consumers seldom remit use tax of their own volition,

and are not likely even to be aware of the requirement.     See

Tenczar, DOR to Taxpayers:     Don't Forget Use Tax, Commonwealth


       1
       The United States Supreme Court's decision in Quill v.
North Dakota, 504 U.S. 298 (1992), has been roundly criticized,
including in a recent Supreme Court concurrence, but remains
binding on this court. See Direct Mktg. Ass'n v. Brohl, 135 S.
Ct. 1124, 1134-1135 (2015) (Kennedy, J., concurring) (describing
Quill as "inflicting extreme harm and unfairness on the States"
in light of "the dramatic technological and social changes that
[have] taken place in our increasingly interconnected economy,"
and comparing $180 billion of United States mail-order sales in
1992 to $3.16 trillion of electronic commerce sales in 2008).
                                                                      5


Mag. (Winter 2014) (Massachusetts 2012 use tax compliance rate

estimated at under two percent; commissioner believes "people

don't pay because they really don't understand how the use tax

works").2    States that rely on use tax lose substantial tax

revenue.     See Direct Mktg. Ass'n v. Brohl, 135 S. Ct. 1124, 1127

(2015) (low compliance with use tax leads to significant revenue

loss).3

     c.     The drop shipment rule.   The drop shipment rule, G. L.

c. 64H, § 1, offers an alternative to the consumer-reported use

tax scheme.    The rule applies to a sales transaction such as the

hypothetical online baseball glove purchase.     When the wholesale

     2
       The Commonwealth Magazine article is available at
https://commonwealthmagazine.org/economy/003-dor-to-taxpayers-
dont-forget-use-tax [https://perma.cc/6NPJ-7BZX]. See also N.
Manzi, Use Tax Collection on Income Tax Returns in Other States,
Research Department of the Minnesota House of Representatives,
at 8 (updated Apr. 2015), http://www.house.leg.state.mn.us
/hrd/pubs/usetax.pdf [https://perma.cc/B9PZ-E7QV] (Massachusetts
use tax revenues have increased in wake of more explicit
reporting structures).
     3
       See also Direct Mktg. Ass'n v. Brohl, 814 F.3d 1129, 1133
(l0th Cir.), cert. denied, 137 S. Ct. 591 (2016) ("The regimes
differ greatly in effectiveness -- compliance with the sales tax
is extremely high, and compliance with the use tax is extremely
low"); D. Bruce, W.F. Fox, & L. Luna, State and Local Government
Sales Tax Revenue Losses from Electronic Commerce, at 4 (2009)
(forecasting across Federal, State, and local uncaptured 2012
electronic commerce tax revenue at $11.4 billion). But see
Henchman, Internet Sales Tax Collections Falling Far Short of
Experts' Estimates, Tax Found. (Mar. 18, 2013),
https://taxfoundation.org
/internet-sales-tax-collections-falling-far-short-experts-
estimates [https://perma.cc/2U43-27QM] (tax revenue in
California and New York from online sales, although substantial,
was much lower than forecast).
                                                                   6


supplier is engaged in business in the Commonwealth but the

retailer is not, the drop shipment rule requires the

Massachusetts wholesale supplier to collect and remit the sales

tax due on the ultimate retail sale to the consumer.   G. L.

c. 64H, § 1.4   Because the sales and use tax schemes are

"complementary," Town Fair Tire Ctrs., Inc. v. Commissioner of

Revenue, 454 Mass. 601, 605 (2009), transactions subject to tax

under the drop shipment rule, as retail sales, are exempt from

use tax.   G. L. c. 64I, § 7 (a).

     The commissioner has consistently interpreted and enforced

the statutory drop shipment rule in the manner just described


     4
       Specifically, the drop shipment rule, which is set out as
part of the definition of "[s]ale at retail," provides:

          "When tangible personal property is physically
     delivered by an owner, a former owner thereof, a factor, or
     an agent or representative of the owner, former owner or
     factor, to the ultimate purchaser residing in or doing
     business in the commonwealth, or to any person for
     redelivery to the purchaser, pursuant to a retail sale made
     by a vendor not engaged in business in the commonwealth,
     the person making or effectuating the delivery shall be
     considered the vendor of that property, the transaction
     shall be a retail sale in the commonwealth by the person
     and that person, if engaged in business in the
     commonwealth, shall include the retail selling price in its
     gross receipts, regardless of any contrary statutory or
     contractual terms concerning the passage of title or risk
     of loss which may be expressly or impliedly applicable to
     any contract or other agreement or arrangement for the
     sale, transportation, shipment or delivery of that
     property. He shall include the retail selling price of the
     property in his gross receipts." (Emphases added.)

G. L. c. 64H, § 1.
                                                                   7


since the sales tax statute became effective in 1968, following

the Supreme Court's National Bellas Hess decision that the Court

reaffirmed in the Quill case.    See, e.g., Letter Ruling 79-43

(Oct. 25, 1979); Letter Ruling 80-76 (Oct. 27, 1980); Letter

Ruling 81-85 (Sept. 17, 1981); Letter Ruling 84-26 (Apr. 27,

1984); Letter Ruling 85-35 (Feb. 27, 1985); and Technical

Information Release 04-26 (Oct. 21, 2004), 1 Official MassTax

Guide, at PWS-112, PWS-451, PWS-481, PWS-521, PWS-640, PWS-696

(Thomson Reuters 2017).    See also National Bellas Hess, Inc.,

386 U.S. at 758.    The rule is undergirded by the separate

statutory presumption that a sale is a taxable retail sale, with

the burden of proving otherwise placed upon the vendor.    G. L.

c. 64H, § 8 (a).5

     2.    Background.   D & H sells consumer goods to retailers at

wholesale and delivers the goods to Massachusetts consumers and

others on behalf of those retailers.     D & H appeals from a

decision of the board rejecting its claim to abate sales taxes


     5
         General Laws c. 64H, § 8, provides in relevant part:

          "(a) It shall be presumed that all gross receipts of a
     vendor from the sale of services or tangible personal
     property are from sales subject to tax until the contrary
     is established. The burden of proving that a sale of
     services or tangible personal property by any vendor is not
     a sale at retail shall be upon such vendor unless he takes
     from the purchaser a certificate to the effect that the
     service or property is purchased for resale, and such
     certificate is received and made available to the
     [Commissioner of Revenue] . . . ."
                                                                         8


assessed by the commissioner pursuant to the drop shipment rule

for the period from September 1, 2006, to March 31, 2009.            D & H

challenges the manner in which the commissioner applied the rule

to its business, arguing that the drop shipment rule required

the commissioner to prove, for each challenged sale transaction,

that the out-of-State retailer was not engaged in business in

the Commonwealth and thus not itself compelled to collect sales

tax.    For the reasons that follow, we conclude that the

commissioner and the board correctly determined that D & H was

responsible as the vendor for collecting and remitting the sales

tax due on products it sold to the out-of-State retailers and

then delivered to consumers where it failed to meet its burden

of proving that the retailers were engaged in business in

Massachusetts.       Accordingly, we affirm the decision of the

board.

       a.   Facts.    We summarize the findings of fact made by the

board.      See G. L. c. 58A, § 13 ("The decision of the board shall

be final as to findings of fact").       D & H is a wholesale

supplier of consumer products, including computer products, home

electronics, and sporting goods, which it sold primarily to

retailers like "big box stores" and their electronic commerce

equivalents.     At all times relevant to this case, D & H was

incorporated and headquartered in Pennsylvania and had six

warehouse distribution centers throughout the country.          It
                                                                   9


employed a sales representative who lived and worked in

Massachusetts.   D & H considered this presence sufficient to

establish nexus for sales tax purposes.6

     Before contracting with retailers to sell and deliver

goods, D & H required that all retailers submit a customer

application.   As part of that application, retailers were

required to list all States in which they did business, and to

provide copies of resale certificates swearing that all goods

were purchased for resale, with sales tax to be collected by the

retailer on ultimate sale to the end consumer.   See G. L.

c. 64H, § 8.   The terms and conditions of the application stated

that retailers would be billed sales tax until they furnished

such certificates.   This was an attempt by D & H to ensure that

sales by D & H would not be characterized as taxable sales.7

     The drop shipment transactions at issue were structured as

follows.   First, a Massachusetts consumer purchased a product

from an out-of-State retailer.   Second, the out-of-State


     6
       "Engaged in business in the commonwealth" is one means of
establishing nexus for sales tax purposes; in this opinion, we
use "engaged in business" interchangeably with "nexus." See
Technical Information Release 96-8 (Oct. 16, 1996), 1 Official
MassTax Guide PWS-37 (Thomson Reuters 2017).
     7
       Specifically, the application required retailers to
certify, "[I]f any property or service so purchased tax-free is
used or consumed by the firm to make it subject to a Sales or
Use Tax, we will pay the tax due directly to the proper taxing
authority when the state law so provides or informs the seller
for added tax billing."
                                                                   10


retailer purchased the product from D & H.    Finally, at the

retailer's direction, D & H packaged and shipped the product

directly to the Massachusetts consumer.    Neither D & H nor the

retailer collected sales tax on these drop shipment sales.

       The commissioner conducted an audit of D & H records for

the years 2006-2009, focusing on drop shipment transactions.

The auditor identified the drop-shipment transactions as those

with a ship-to address (i.e., the address of the end consumer)

in Massachusetts but a bill-to address (that of the retailer)

outside Massachusetts.    From this group, the auditor first

eliminated sales to retailers known to be engaged in business in

Massachusetts, such as Best Buy and Target.    The auditor

similarly removed from consideration sales to retailers

registered as Massachusetts vendors for sales tax purposes.

       Having thus winnowed the list of taxable drop-shipment

transactions, the auditor provided the list to D & H so that it

had an opportunity to demonstrate the nontaxable nature of any

contested transaction.    D & H provided several resale

certificates that were sufficient to establish a nontaxable

transaction.   As to the rest, D & H offered no evidence that the

sales at issue were made to retailers engaged in business in the

Commonwealth that would thus be responsible for collecting sales

tax.   At the audit's conclusion, the commissioner assessed D & H

additional taxes, interest, and penalties totaling $525,024.17
                                                                         11


for the periods at issue.        The auditor used the wholesale resale

price as a proxy for the final sales price.

    b.      Procedural history.      Following the audit, D & H sought

an abatement, which the commissioner denied.          D & H then

appealed from this decision to the board.         In its hearing before

the board, D & H offered documentary evidence and the testimony

of its comptroller, and the commissioner presented her case

through the auditor's testimony.         The board issued its decision

for the commissioner in October, 2014, followed by findings of

fact and report in April, 2016.         D & H then filed its appeal in

the Appeals Court, and we transferred the case to this court on

our own motion.

    3.      Discussion.   a.    Standard of review.    "We will not

disturb the board's findings so long as they are supported by

substantial evidence and a correct application of the law."

Bell Atl. Mobile of Mass. Corp. v. Commissioner of Revenue, 451

Mass. 280, 283 (2008).         Although we resolve questions of law de

novo, in doing so we give "substantial deference" to the board's

reasonable interpretation of tax statutes because the board is

an agency charged with administration of tax law (citation

omitted).    Attorney Gen. v. Commissioner of Ins., 450 Mass. 311,

319 (2008).

    b.      Burden of proof.     D & H argues that before the

commissioner may assess sales tax against a wholesale deliverer
                                                                      12


of retail goods pursuant to the drop shipment rule, the

commissioner must establish that the retailer in the

transactions at issue did not do business in Massachusetts.

Although the commissioner must provide an evidentiary basis for

an assessment, we reject D & H's contention that the

commissioner failed adequately to do so here.

    The validity of a tax assessment is presumptively correct,

and the taxpayer bears the burden of proving he or she is

entitled to an abatement as a matter of law.     Schlaiker v.

Assessors of Great Barrington, 365 Mass. 243, 245 (1974).       See

Boston Professional Hockey Ass'n v. Commissioner of Revenue, 443

Mass. 276, 285 (2005), quoting Koch v. Commissioner of Revenue,

416 Mass. 540, 556 (1993) ("The taxpayer has the burden of

proving as a matter of law [its] right to an abatement of the

tax").   See generally General Elec. Co. v. Assessors of Lynn,

393 Mass. 591, 599 (1984) ("taxpayer bears the burden of

persuasion of every material fact").    This is consistent with

the general principle that the moving party bears the burden of

proof, and finds additional support in several "compelling

rationales" unique to tax law.     Raleigh v. Illinois Dep't of

Revenue, 530 U.S. 15, 21 (2000).    "[N]ot to be disregarded

lightly," these "powerful justifications" for the taxpayer's

burden include "the vital interest of the government in

acquiring its lifeblood, revenue"; "the taxpayer's readier
                                                                  13


access to the relevant information," and "the importance of

encouraging voluntary compliance by giving taxpayers incentives

to self-report and to keep adequate records in case of dispute"

(citations omitted).   Id.

     Certainly, the taxpayer's burden of proof does not relieve

the department of its obligation to provide support for the

validity of its assessment.8   See First Nat'l Stores, Inc. v.

Assessors of Somerville, 358 Mass. 554, 559 (1971).   See also In

re Healthco Int'l, Inc., 257 B.R. 379, 382-383 (Bankr. D. Mass.

2001), aff'd as to sales tax issue, U.S. Dist. Ct., No. 01-

40047-JLT (D. Mass. July 8, 2001) (commissioner failed to meet

burden of production where department had destroyed all audit

records and could neither substantiate nor even explain

assessment amount).    In the absence of supporting evidence for a

tax assessment, a taxpayer will be entitled to an abatement.

See First Nat'l Stores, Inc., 358 Mass. at 559.   See also In re

Healthco Int'l, Inc., 257 B.R. at 383, citing Waban, Inc. v.

Commissioner of Revenue, 22 Mass. App. Tax Bd. Rep. 31, 38

(1997) (taxpayer entitled to abatement where department


     8
       The Department of Revenue (department) may verify by audit
the accuracy of any filed tax return. G. L. c. 62C, § 26 (b).
When such an audit identifies a deficiency, the department may
assess the proper tax and make a demand for payment. G. L.
c. 62C, §§ 26 (b), 31. A taxpayer disputing the assessment may
apply for abatement, and any tax found "excessive in amount or
illegal" shall be abated, in whole or in part. G. L. c. 62C,
§ 37.
                                                                  14


introduced no documentary evidence and scant testimony

supporting its assessment); Coan v. Commissioner of Revenue, 25

Mass. App. Tax Bd. Rep. 763, 766 (2000) (same, where department

was unable to establish evidentiary basis for its assessment

despite readier access to relevant records).

    In this case, the department established a factual basis

for the validity of its assessment, which D & H failed to rebut.

D & H had a business practice of requiring any retailer customer

to disclose the States in which it did business; the auditor

compiled a list of drop shipment transactions in which the

retailer was not registered as a Massachusetts vendor and no tax

had been collected, affording D & H the opportunity to rebut the

conclusion that the retailers did not do business in

Massachusetts; and D & H did not do so.   Particularly where

D & H has "readier access to the relevant information" than does

the commissioner, its failure to demonstrate that its retail

customers were doing business in the Commonwealth ends the

inquiry.   See Raleigh, 530 U.S. at 21; William Rodman & Sons,

Inc. v. State Tax Comm'n, 373 Mass. 606, 611 (1977) ("[a]s a

matter of sound policy," burden should be placed on wholesaler

with best access to records).   Moreover, D & H bore the burden

of proving otherwise pursuant not only to the general principle

that the burden rests with the taxpayer claiming an abatement,

but also to G. L. c. 64H, § 8 (a) (absent resale certificate
                                                                  15


from purchaser, "[t]he burden of proving that a sale of services

or tangible personal property by any vendor is not a sale at

retail shall be upon such vendor").

     c.   Dormant commerce clause.9   D & H also challenges the

drop shipment rule on constitutional grounds, contending that

the rule discriminates against interstate commerce.    See art. I,

§ 8, cl. 3, of the United States Constitution; Complete Auto

Transit, Inc. v. Brady, 430 U.S. 274, 279 (1977) (State tax does

not unconstitutionally burden interstate commerce if tax is

applied to activity having substantial nexus with State, is

fairly apportioned, does not discriminate against interstate

commerce, and is fairly related to services provided by State).

Addressing a constitutional challenge to a tax measure "begin[s]

with the premise that the tax is endowed with a presumption of

validity and is not to be found void unless its invalidity is

established beyond a rational doubt."    Andover Sav. Bank v.

Commissioner of Revenue, 387 Mass. 229, 235 (1982).

     A tax is discriminatory in violation of the dormant

commerce clause when it results in "differential treatment of

in-[S]tate and out-of-[S]tate economic interests that benefits

     9
       Article I, § 8, cl. 3, of the United States Constitution -
- the commerce clause -- expressly grants Congress broad power
to regulate interstate commerce. Comptroller of the Treasury of
Md. v. Wynne, 135 S. Ct. 1787, 1794 (2015) (Wynne). Where
Congress has neither preempted nor approved State regulation,
the negatively implied dormant commerce clause still operates to
limit State interference with interstate commerce. Id.
                                                                  16


the former and burdens the latter."   Oregon Waste Sys., Inc. v.

Department of Envtl. Quality of Or., 511 U.S. 93, 99 (1994).

D & H argues that wholesale suppliers with a Massachusetts nexus

are penalized for doing business with out-of-State retailers,

because transactions with in-State retailers do not cast

wholesale suppliers as vendors obligated to collect sales tax.

But even assuming this disparity for the sake of argument, such

a scheme would establish for Massachusetts retailers a

disadvantage at odds with the concerns animating the dormant

commerce clause.   See Department of Revenue of Ky. v. Davis, 553

U.S. 328, 337-338 (2008) ("The modern law of what has come to be

called the dormant [c]ommerce [c]lause is driven by concern

about 'economic protectionism -- that is, regulatory measures

designed to benefit in-[S]tate economic interests by burdening

out-of-[S]tate competitors'" [citation omitted]).

     Moreover, by focusing on the party collecting the tax,

D & H fails to demonstrate any unconstitutional burden created

by the tax itself.10   See Quill Corp., 504 U.S. at 312 ("the


     10
       Because the drop shipment rule requires that vendors
include the retail selling price in gross receipts, G. L.
c. 64H, § 1, D & H Distributing Company (D & H) argues that it
lacks the necessary information for compliance because it has
knowledge only of the wholesale price. But a wholesale supplier
like D & H is better positioned than the Commissioner of Revenue
(commissioner) to solicit this information in its contractual
dealings with thousands of out-of-State retailers. See Lyon
Metal Prods., Inc. v. State Bd. of Equalization, 58 Cal. App.
4th 906, 912 n.3 (1997), cert. denied, 524 U.S. 916 (1998).
                                                                  17


[c]ommerce [c]lause and its nexus requirement are informed not

so much by concerns about fairness for the individual defendant

as by structural concerns about the effects of [S]tate

regulation on the national economy").   See also Genentech, Inc.

v. Commissioner of Revenue, 476 Mass. 258, 272 (2017).   Such an

unconstitutional burden exists when a State taxes a transaction

"more heavily when it crosses [S]tate lines than when it occurs

entirely within the State."   Comptroller of the Treasury of Md.

v. Wynne, 135 S. Ct. 1787, 1794 (2015), quoting Armco Inc. v.

Hardesty, 467 U.S. 638, 642 (1984).11   Here, "the same sales tax

would be imposed on the transaction if it had happened entirely

within [Massachusetts]."   Lyon Metal Prods., Inc. v. State Bd.

of Equalization, 58 Cal. App. 4th 906, 912 (1997), cert. denied,

524 U.S. 916 (1998) (finding no commerce clause violation under



Alternatively, a standard markup may be codified. See 2 J.R.
Hellerstein & W. Hellerstein, State Taxation § 18.04[1][b][iv]
(3d ed. 2002) (citing Cal. Code Regs. tit. 18, § 1706[c][2],
which calculates retail price using ten per cent markup on drop
shipper's price absent other evidence). We do not resolve the
issue here, where the commissioner assessed sales tax based only
on the lower wholesale price.
     11
       A State tax subjecting interstate commerce to the burden
of "multiple taxation" also creates an undue burden. Wynne, 135
S. Ct. at 1794. D & H argues that the drop shipment rule does
this by subjecting the same transactions to both sales and use
tax. This argument misapprehends the complementary nature of
our sales and use tax schemes, discussed supra, under which any
transaction subject to sales tax is exempt from use tax. G. L.
c. 64I, § 7 (a). Even ignoring the low consumer compliance with
the use tax, any use tax collected in error on a drop shipment
entitles the consumer to a credit.
                                                                18


California's cognate rule).   Because transactions with retailers

in and out of State are equally subject to tax, there is no

greater burden on the interstate transaction and thus no

violation of the dormant commerce clause.

                                   Decision of the Appellate
                                     Tax Board affirmed.
