February 23, 1981

You inquire whether sales by ********** ("Company") from its New York office to Massachusetts customers are subject to the Massachusetts sales and use taxes.

The Company is a registered Massachusetts vendor. It has two employees who reside in Massachusetts; the employees provide potential Massachusetts customers with information about the Company and its products.

Every vendor engaged in business in Massachusetts must collect and pay over sales and use taxes on (1) its sales of tangible personal property in Massachusetts; and (2) its sales of tangible personal property outside Massachusetts for storage, use or other consumption in Massachusetts. Massachusetts General Laws Chapter 64H, Sections 2 and 3; Chapter 64I, Sections 2 and 4.

For purposes of both the sales and use taxes, "engaged in business in Massachusetts" includes "having a business location in the commonwealth," and a vendor that has one or more employees located in Massachusetts is considered to have a business location in the Commonwealth. Chapter 64H, Section 1(5); Chapter 64I, Section 1(1). An employee is located in Massachusetts

"(a) if his service is performed entirely within the commonwealth; or

(b) if his service is performed both within and without the commonwealth, but in the performance of his service he regularly commences his activities at, and returns to, a place within the commonwealth." Chapter 64H, Section 1(5).

Based on the foregoing, it is ruled that the Company is engaged in business in Massachusetts within the meaning of Chapter 64H, Section 1(5); therefore, the Company must collect and pay over sales and use taxes on its sales in Massachusetts and its sales outside Massachusetts for storage, use or other consumption in Massachusetts.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers

Commissioner of Revenue

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Enclosure

LR 81-17