November 27, 1981
********** ("Company") is a registered Massachusetts sales tax vendor. You inquire whether the Massachusetts sales tax applies to the Company's sales of tangible personal property in the following circumstances.
The items sold are transported from the Company's Massachusetts business premises to the out-of-state offices of its customers, for use out of state. The goods may be picked up in Massachusetts by the customer and transported out of state in the customer's own vehicle, delivered out of state by the Company in a Company vehicle, or shipped out of state by a common carrier. In the last case, the F.O.B. point may be Massachusetts or the destination state, and shipment may be contracted and paid for by the Company or the customer.
Massachusetts General Laws Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property in Massachusetts. A sale of tangible personal property takes place in Massachusetts if title to or possession of the property is transferred in Massachusetts (G.L. c. 64H, s. 1(12)(a)). Section 6(b) of Chapter 64H provides that the sales tax does not apply to sales of tangible personal property "which the vendor is obligated under the terms of any agreement to deliver to a purchaser outside the commonwealth or to an interstate carrier for delivery to a purchaser outside the commonwealth."
Based on the foregoing, it is ruled that:
(1) The sales tax applies to the Company's sales of tangible personal property to customers who pick up the items sold at the Company's Massachusetts business premises and themselves transport the items out of state.
(2) The sales tax does not apply to the Company's sales of tangible personal property where, by the terms of any agreement, (a) the Company must deliver the items sold to an out-of-state customer in the Company's own vehicle; or (b) the Company must deliver the items sold to a common carrier for delivery to the customer out of state, whether the Company or the customer contracts and pays for the shipment, and whether the F.O.B. point is Massachusetts or the destination state.
You also inquire whether local sales taxes apply to the Company's intrastate sales of tangible personal property in Massachusetts.
The Massachusetts sales and use taxes are five per cent taxes imposed at the state level; there is no authority for imposition of a local sales or use tax by any political subdivision of Massachusetts.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue