Amazon has informed its third-party sellers whose products are stored in its facilities in Massachusetts that it will be providing information to the state tax authority in what is believed to be a first for the company.

The Seattle-based e-commerce giant told merchants who have items stored in its fulfillment centers in the state that it will be turning over the information starting Friday. The company lost a court battle with the state revenue collectors over access to the information last year.

“Amazon has received a valid and binding legal demand from the Massachusetts Department of Revenue (DOR) requiring that Amazon disclose the following information about sellers to the DOR: contact information (name, address, federal tax ID number, and phone number); estimated value of the seller’s inventory in our Massachusetts fulfillment centers, calculated based on the seller’s selling prices in late 2016 or 2017,” the company wrote in an email Monday to merchants in its Fulfillment by Amazon program. “To comply with our obligations under the law, we plan to provide your information to the DOR by January 26, 2018. Because each seller’s business and tax needs are unique, we encourage you to consult with a tax advisor to answer any questions you have.”

Amazon did not immediately respond to a request for comment about whether it plans to report the information to other states.

The company has been increasingly willing to collect sales taxes from customers in many states in recent years after historically resisting such efforts. But as Amazon has opened distribution centers around the country, it has increasingly fallen subject to the nexus rules under the Supreme Court’s landmark 1992 decision in the case of Quill Corp. v. North Dakota requiring merchants to collect sales taxes from customers if the seller has a physical presence in the state. Amazon is planning to open a second headquarters outside Washington State, and Boston is one of the cities under consideration. While it has been willing to collect taxes on sales made directly from the site, it has been reluctant to require third-party merchants who do business through its website to do the same.

“It seems to be that Amazon’s interaction with the state, and the concept of what a marketplace is, is evolving with time,” said Scott Peterson, vice president of U.S. tax policy at the tax technology company Avalara. “In the beginning, I think most states didn’t have a clue whether or not they thought the presence of Amazon in a state would have any effect on anybody that sold on Amazon. The refinement of that philosophy has taken the states years to develop and become comfortable with. I think Amazon has been doing the best it could in its discussions with Massachusetts about the list of sellers, but it took states a long time to figure out the relationship between Amazon and its third-party sellers, and the relationship between them and the state, to really understand what the state’s authority really is.”

A further complication could be a case that the U.S. Supreme Court recently agreed to take up this term involving another e-commerce giant, Wayfair, and the state of South Dakota that could upend the precedent set in the Quill decision (see Supreme Court to decide South Dakota challenge to Quill).

“The issue with the South Dakota case is if they do decide that they want to modify the Quill decision, it seems to me unusual that they would simply say ,’Oh, what was good in 1992 isn’t good anymore, and states can make people do whatever you want.’ That strikes me as maybe a bridge too far,” said Peterson. “It’s not like them to create chaos. It’s not like them to say, ‘We were wrong. It’s entirely different now.’ That’s the challenge people are trying to understand. If they did take this for a reason, and they do intend to make a change, how far will that change go? If their decision is that states have got to have a reasonable law, and maybe in addition to physical presence, which has been long established as a precedent, maybe there should be an economic presence test as well, then South Dakota’s law seems like a reasonable conclusion. Indiana, Wyoming, Tennessee and Alabama all have either a law or regulation that’s similar to South Dakota’s. Does that mean if the court agrees with South Dakota, that those states’ laws automatically become good? If the court does agree with South Dakota, does all some other state have to do is create something like South Dakota’s to get taxing authority? A lot of questions.”

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