January 17, 1980

You inquire whether ********** (the "Carrier"), which provides common carrier local service within two Massachusetts towns, is entitled to exemption from sales tax on its purchases of motor buses and related parts, materials and tools under Massachusetts General Laws Chapter 64H, Section 6(aa). The two towns are within the exclusive jurisdiction of the Massachusetts Bay Transportation Authority ("MBTA"), which has authorized the service by contract with the towns. The Carrier has not obtained a certificate of public convenience and necessity from the Massachusetts Department of Public Utilities ("DPU").

Chapter 64H, Section 6(aa) exempts from tax

"[s]ales of new and used motor buses used to provide scheduled, intracity local service (as defined by the Department of Public Utilities), and repair or replacement parts therefor, and materials and tools used in and for the maintenance and repair thereof to, and for the use of common carriers of passengers by motor vehicle for hire, which hold at least one certificate, issued by the department of public utilities pursuant to the provisions of section seven of chapter one hundred and fifty-nine A"

and requires the Commissioner to prepare and issue to any such duly certified common carrier a statement that the carrier is entitled to exemption pursuant to Section 6(aa).

Under Chapter 159A, Section 7, no person may operate under a motor vehicle common carrier's license issued by a local licensing authority unless he also has obtained from the DPU a certificate declaring that public convenience and necessity require such operation; however, the MBTA is authorized under Chapter 161A, Section 3(i)

"[t]o provide mass transportation service, whether directly, jointly or under contract, on an exclusive basis... in the area constituting the authority and without being subject to the jurisdiction and control of the department of public utilities in any manner except as to safety of equipment and operations..."

This provision removes the MBTA from the jurisdiction of the DPU and exempts the MBTA from most DPU supervision. It reflects a legislative judgment that the MBTA adequately safeguards the public interest without DPU supervision.

Based on the foregoing, it is ruled that purchases of motor buses used to provide scheduled, intracity local service, and related parts, materials and tools, by and for the use of common carriers by motor vehicle for hire, which operate under contract with the MBTA, are exempt from sales tax under Chapter 64H, Section 6(aa).

Very truly yours

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH/JCD/jmcd

LR-80-3