FACTS: Bob, a vendor required to be registered under G.L. c. 64H, § 7, repairs boats at his shipyard and sometimes acts as a broker for customers selling their boats. From time to time, Bob takes possession of a customer's boat and docks it on his premises; at other times, the boat is docked elsewhere. Bob, however, always has the authority to commit the owner to sell or to transfer title or possession to the buyer without any additional action by the owner, provided the owner's conditions are met, e.g., a minimum price or sale by a certain date. Bob is paid a commission after a sale.

ISSUE: Must Bob collect and pay over the sales tax on the sale of these used boats?

DISCUSSION: Massachusetts imposes an excise upon sales at retail of tangible personal property by any vendor. Unless the sale is otherwise exempt, the vendor must collect and pay over the sales tax. G.L. c. 64H, § 2.

Under G.L. c. 64H, § 6(c), the owner of a boat originally acquired for personal use may sell it without collecting the sales tax since the sale is considered casual and isolated. The buyer will, however, pay a use tax. G.L. c. 64H, § 6(c); G.L. c. 64I, § 7(b). The use of an agent or broker to aid in making those sales will not alter this result unless the agent is a retailer and becomes the vendor of the goods. See Sherman v. Commissioner of Revenue, 24 Mass. App. 64, 67 (1987).

Since Bob is regularly engaged in selling boats and other tangible personal property (i.e., parts for boat repair), Bob is a retailer. If Bob is the vendor of the boat, he must collect and pay over the tax; the sale is not considered casual and isolated since the intervention of a retailer as vendor of the goods changes the character of the sale.

Here, Bob is the vendor of the boat (whether or not it is on his premises) since he has full authority to commit the owner of the boat to sell or authority to transfer title or possession of the boat to the buyer. Bob must, therefore, collect the tax. Without authority to commit the owner or to transfer title or possession, Bob would not be considered the vendor of the boat, but the agent of the owner making a casual and isolated sale. In these situations, Bob would not collect the tax. Instead, the buyer would pay the use tax when the boat is registered unless the sale is otherwise exempt. G.L. c. 64I, § 7(b). If the boat is not registered, the buyer would pay the tax to the Department of Revenue on or before the twentieth day of the month following the month in which the boat was first used here. G.L. c. 62C, § 16(i).

DIRECTIVE: Since Bob is a retailer and has authority to commit the owner to a sale or to transfer title or possession of used boats, he is the vendor of these boats and is liable for the collection and payment of the sales tax.

REFERENCE: G.L. c. 62C, § 16(i); G.L. c. 64H, §§ 1(9), 1(18), 2, 6(c); G.L. c. 64I, § 7(b); Sherman v. Commissioner of Revenue, 24 Mass. App. 64, 67 (1987).

/s/Stephen W. Kidder
Stephen W. Kidder
Commissioner of Revenue

December 11, 1989

DOR-D 89-18


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 CMR 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 may rely upon this Directive only if the facts, circumstances and issues presented in other cases are substantially the same as those set forth in this Directive.