August 20, 1980
********** (the "Craft Shop") provides plaster objects and finishing materials to members of the Girl Scouts, Boy Scouts and similar organizations, who use them to create painted figurines and plaques. In some cases a troop visits the craft shop and participates in the craft activities on the premises; in others, the craft activities take place at the regular troop meeting place.
The Craft Shop imposes a charge for each plaster object selected, and an additional charge for materials used in finishing each item. Ordinarily, a troop leader transmits payment when the craft materials are purchased. Sometimes the money comes from regular troop dues; sometimes it is specially collected from the children at about the time the materials are purchased. Occasionally payment comes in part from regular dues and in part from a special collection.
The organizations in question are exempt from taxation under Internal Revenue Code Section 501(c)(3), and hold certificates of exemption (Forms ST-2) from the Commissioner of Revenue.
You inquire whether sales of the materials are exempt from tax under Massachusetts General Laws Chapter 64H, Section 6(e) when troop leaders present exempt purchaser certificates (Forms ST-5) in connection with the sales, and if so, whether a certificate must be presented upon each sale. You also ask what records you as vendor must keep with respect to the sales.
Chapter 64H, Section 6(e) exempts from tax
"[s]ales to any corporation, foundation, organization or institution, which is exempt from taxation under the provisions of section five hundred and one (c)(3) of the Federal Internal Revenue Code, as amended, and in effect for the applicable period; provided, however, that such sales shall not be exempt unless (1) the tangible personal property which is the subject of such sales is used in the conduct of such religious charitable, educational or scientific enterprise, (2) such corporation, foundation, organization or institution shall have first obtained a certification from the commissioner stating that it is entitled to such exemption, and (3) the vendor keeps a record of the sales price of each such separate sale, the name of the purchaser, the date of each such separate sale, and the number of such certificate."
Based on the foregoing, it is ruled that sales of materials by the Craft Shop are exempt from tax where (1) members of the Girl Scouts, Boy Scouts or other similar organizations exempt from tax under Section 501(c)(3) of the Internal Revenue Code will use them in organized group activities of the organization; (2) the organization holds a valid Form ST-2 from the Commissioner of Revenue; (3) a troop leader or other representative presents a properly filled-out exempt purchaser certificate at the time of sale; and (4) you as vendor keep a record for each sale of the sales price, the name of the purchasing organization, the date of the sale, and the number of the organization's certificate of exemption. An exempt purchaser certificate must be presented in connection with each sale, but you need not keep the certificate as part of your records.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue
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