November 21, 1980

********** ("Corporation") is engaged in the business of refinishing hospital equipment, metal office furniture and appliances of its customers on location. It pays sales tax on its purchases of paint and other supplies used in the refinishing process. You inquire whether the Corporation's charges for refinishing equipment in Massachusetts are subject to the sales tax.

Massachusetts General Laws Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property in Massachusetts. Chapter 64H, Section 1(14) provides that, in determining the sales price on which the tax is based, no deduction shall be taken on account of the cost of materials used or labor or service costs; it also provides that any amount paid for any services that are a part of a sale must be included in the sales price.

On the other hand, Section 1(13)(c) of Chapter 64H excludes from the definition of "sale at retail"

"personal service transactions which involve no sale or which involve sales as inconse­quential elements for which no separate charges are made."

Sales and Use Tax Regulation 64H.03 explains the application of the Massachusetts sales and use taxes to service enterprises. It provides in Subsection (2) that a service transaction is not subject to the sales tax where the real object of the transaction is the service itself, and no transfer of tangible personal property occurs.

Based on the foregoing, it is ruled that the Corporation's charges for refinishing its customers' equipment are not subject to the Massachusetts sales tax.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

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LR 80-80