July 23, 1979
You request a ruling on behalf of ********** (the "Corporation") as to their responsibility for the collection and payment of Massachusetts sales and use taxes.
The Corporation produces and sells Disappearing Automatic Retaliatory Target Range Systems for training members of the armed forces and law enforcement agencies in the skilled use of small arms in a variety of situations. These sales are made to the federal government and to state and local governments.
At present, all orders are solicited by telephone and through the postal service via brochures. In the future, the Corporation will send a representative into Massachusetts to introduce its product line and to call on existing customers. The representative will have no responsibility for receiving purchase orders or granting sales approval, which functions are undertaken by the Corporation solely at its office in South Carolina. Products sold will be shipped to customers from points outside of Massachusetts.
The Corporation may perform installation and training services within Massachusetts in connection with its sales, and from time to time may enter Massachusetts for the purpose of making repairs to equipment which they have sold.
The Corporation does not now own or contemplate owning in the future any real or personal tangible or intangible property having a personal situs within Massachusetts.
Massachusetts General Laws Chapter 64H, Section 1(18) defines a "vendor" as "a retailer or other person selling tangible personal property of the kind the gross receipts from the sale of which are required to be included in the measure of the tax imposed by [Chapter 64H]."
Vendors may not do business in Massachusetts unless registered as such. (G.L. c. 64H, s. 7) A person is engaged in business in the Commonwealth, for sales tax purposes, if "regularly soliciting orders for the sale of tangible personal property by salesmen, solicitors, or representatives in the Commonwealth, unless such activity consists of solicitation by direct mail or advertising via newspapers, radio, or television ..." (G.L. c. 64H, s. 1(5)).
Sales to the United States, the Commonwealth or their respective agencies are exempt under G.L. c. 64H, s. 6(d).
Based on the foregoing it is ruled:
1. The Corporation will be engaged in business in Massachusetts and should register as a vendor under the Massachusetts sales and use tax.
2. Sales made by the Corporation to the federal government, to the Commonwealth of Massachusetts or its political subdivisions, or to agencies of the foregoing, are not subject to Massachusetts sales and use tax. If sales are made to other persons within Massachusetts, a tax of 5% of the sales price must be charged to the customer and remitted to the Commonwealth with the appropriate sales and use tax return.
3. The sales and use tax returns and payments are due on a monthly, quarterly or annual basis depending on the amount of the vendor's tax liability. No return is due if no taxable sales have been made.
I am enclosing a registration application and a copy of Massachusetts Sales and Use Tax Regulation No. 15 dealing with quarterly and annual returns.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue