December 23, 1981
You inquire whether the Massachusetts sales or use tax applied to the transfer of motor vehicles from ********** ("Corporation A"), a Massachusetts corporation, to ********** ("Corporation B"), also a Massachusetts corporation, pursuant to a merger of Corporation A into Corporation B carried out in accordance with General Laws Chapter 156B, Section 78.
The corporations' "Joint Plan and Agreement of Merger" provided that upon the effective date of the merger, Corporation A would cease to exist, and its property (including the motor vehicles) would become the property of Corporation B as the surviving corporation. It further provided that the former shareholders of Corporation A would receive shares in Corporation B in proportion to their interests in Corporation A.
Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property in Massachusetts. Chapter 64I, Section 2 imposes an excise on the storage, use or other consumption in Massachusetts of tangible personal property purchased for storage, use or other consumption in Massachusetts. Casual and isolated sales by a vendor who is not regularly engaged in the business of making sales at retail are exempt from the sales tax (G.L. c. 64H, s. 6(c)), but casual and isolated sales of motor vehicles are generally subject to the use tax (G.L. c. 64H, s. 6(c); c. 64I, s. 7(b)).
In Commissioner of Revenue v. SCA Disposal Services, Inc., 1981 Mass. Adv. Sh. 1337, 421 N. E. 2d 766, the Supreme Judicial Court held that a transfer of motor vehicles pursuant to a statutory merger of wholly-owned subsidiary corporations is not subject to the use tax.
Based on the foregoing, it is ruled that the transfer of motor vehicles from Corporation A to Corporation B pursuant to a statutory merger of Corporation A into Corporation B was not subject to the sales or use tax.
Very truly yours,
/s/Daniel B. Breen
Daniel B. Breen
Acting Commissioner of Revenue