More taxing budget news

It surely pained them to do it, since it blew a $30 million hole in next year’s already out-of-whack budget, but the Baker administration yesterday backed off a plan to begin collecting sales taxes from more internet retailers selling goods in Massachusetts. In light of a pending legal challenge, however, the procedural move was the only one that made sense.

For years there has been tremendous pressure from brickand-mortar outlets in the Bay State, who argue that on-line sellers who aren’t required to collect and remit state sales taxes put them at a competitive disadvantage. As part of his fiscal 2018 budget plan Gov. Charlie Baker had announced a new policy, establishing a new sales threshold that would trigger required payments from online sellers.

But groups representing online retailers argue that a Supreme Court ruling shields them from having to collect and remit state sales taxes unless they have a physical presence in the state. So they challenged Baker’s directive in court.

Of course the big guys (namely, Amazon) have already begun collecting sales tax from Massachusetts customers, so this effort to spread the burden more evenly seemed inevitable. Baker’s policy would have ensnared only those who sell in high volume — at least $500,000, and 100 transactions in Massachusetts annually — so the Kansas mom who sells trinkets on Etsy won’t become a slave to the state Department of Revenue.

Revenue Commissioner Michael Heffernan rescinded the new directive after a hearing on the lawsuit this week, State House News Service reported, and the suit was then withdrawn. But Baker still plans to pursue the new tax scheme by regulation, rather than by fiat. The plaintiffs promise that when he does, they’ll head straight back to court.

For now the bottom line is that the state treasury next year may be $30 million lighter — and the bad news just keeps coming.