DISCUSSION: This Directive discusses the application of the use tax to property purchased out of state and brought into the Commonwealth. In particular, it focuses on the effect of the statutory presumption of taxability provided in G.L. c. 64I, § 8(f). For purposes of this Directive, it is assumed that no sales tax was paid or due to a state other than Massachusetts. It is also assumed that no exemptions from the tax apply unless otherwise indicated and that the owner of the property has complied with any applicable registration requirements.

Massachusetts imposes a use tax on the storage, use or other consumption within the Commonwealth of tangible personal property purchased for storage, use or other consumption here. G.L. c. 64I, § 2.

Whether property was purchased for use within the Commonwealth depends upon the facts and circumstances of the particular transaction. Factors to be considered include:

1) the residency of the taxpayer; 2) whether there was an intervening use of the property in another state; 3) the length of time between purchase of the property and its use in Massachusetts; 4) an unforeseen change in circumstances occurring after purchase; and, 5) whether the purchaser knew at the time of purchase that the property would be used in Massachusetts. It should be noted that the use tax may apply to non-residents. Furthermore, property need not be used exclusively or even primarily in Massachusetts to be considered purchased for use within the Commonwealth. Towle v. Commissioner of Revenue, 397 Mass. 599, 605 (1986).

Property is presumed to be purchased for use here if it is delivered or brought into the Commonwealth within six months of its purchase. G.L. c. 64I, § 8(f). Unless the taxpayer meets the burden of proving the contrary, based upon the particular facts and circumstances of the transaction, the property will be subject to the use tax. See 830 CMR 64H.02(3)(c).

The effect of the statutory presumption may be illustrated by the following examples:

EXAMPLE 1: Taxpayer Taylor, a resident of New Hampshire, purchased a sailboat in Connecticut on May 1. She brought the boat to the Cape in June, renting space for it in a Wellfleet marina. Since that time she has sailed the boat in nearby waters.

Since Taylor brought the boat into Massachusetts within six months of purchase, she has the burden of proving it was not purchased for use here. Under these facts and circumstances, Taylor cannot meet this burden and is, therefore, liable for the use tax on the boat.

EXAMPLE 2: Taxpayer Jones, a resident of Oregon, purchased an automobile there on June 1. On October 1, Jones' employer unexpectedly closed the Oregon plant where he worked and transferred him to Massachusetts. Jones moved to Massachusetts on October 15, brining the car with him.

Since Jones brought the car into Massachusetts within six months of purchase, he has the burden of proving it was not purchased for use here. Under these facts and circumstances, he can meet this burden upon presentation of adequate documentation. Accordingly, the use tax will not apply.

When property is brought here more than six months after purchase, the statutory presumption does not apply, and the Commissioner has the burden of proving that the property was purchased for use here. Unless the Commissioner meets this burden, the tax will not apply.

This principle may be illustrated by the following examples:

EXAMPLE 3: Taxpayer Davis, a resident of the Commonwealth, is a tenured professor at the University of Massachusetts. For his sabbatical, he decided to purchase a small boat and sail around the Caribbean. On December 1, he went to Florida where he purchased the boat for his trip. He returned to Massachusetts with the boat on July 1. Since that time he has sailed the boat in Massachusetts waters.

Since Davis brought the boat into Massachusetts more than six months after purchase, the Commissioner has the burden of proving it was purchased for use here. Under these facts and circumstances, the Commissioner can meet this burden. Therefore, the use tax will apply.

EXAMPLE 4: Able Corp., a Montana corporation, purchased construction equipment there in 1983. This equipment was used exclusively in Montana until 1986 when, due to favorable business conditions, the corporation decided to expand its operations into other states. On January 1, 1987, the corporation successfully bid on a Massachusetts construction project and later brought the equipment here.

Since the corporation brought the property into Massachusetts more than six months after purchase, the Commissioner has the burden of proving it was purchased for use here. Under these facts and circumstances, the Commissioner cannot meet this burden and the use tax will not apply.

In situations like those set forth in Example 2 and 4, where property was not purchased for use in the Commonwealth, taxpayers may choose to first pay the tax and then file Form CA-6 with the Commissioner for an abatement or they may apply for an exemption from use tax by filing Form RMV-1 and presenting adequate documentation to support the exemption.

Form RMV-1 and supporting documentation for this exemption may be filed at certain Department of Revenue locations and at those Registry of Motor Vehicles offices which are staffed with Department of Revenue personnel. For a listing of these locations contact:

Department of Revenue
Determination Bureau
100 Cambridge Street
Boston, MA 02204
(617) 727-2505
(617) 727-2510

REFERENCE: G.L. c. 64I, §§ 2, 8(f); 830 CMR 64H.02(3)(c); Towle v. Commissioner of Revenue, 397 Mass. 599 (1986).

/s/Ira A. Jackson
Ira A. Jackson
Commissioner of Revenue

01 June1987

This Directive represents the official position of the Department of Revenue on the application of the law to the facts as stated. The Department and its personnel will follow this Directive, and taxpayers may rely upon it, unless it is revoked or modified pursuant to 830 C.M.R. § 62C.01(5)(e). In applying this Directive, however, the effect of subsequent legislation, regulations, court decisions, Directives, and TIRs must be considered, and Department personnel and taxpayers are cautioned against reaching the same conclusions in other cases unless the facts, circumstances and issues are substantially the same.