April 27, 1981
********** ("Company") is an out-of-state corporation that finances purchases of tires. You state that the Company is not engaged in business in Massachusetts within the meaning of Massachusetts General Laws Chapter 64H, Section 1(5). Sales financed by the Company are structured as follows:
(1) the Company gives a credit card or purchase order to a customer ("Customer");
(2) the Customer presents the credit card or purchase order to the tire manufacture ("Manufacturer") at one of its outlets, and the Manufacturer transfers title to and possession of the tires to the Customer;
(3) the Manufacturer bills the Company; and
(4) the Company pays the Manufacturer and bills the Customer for the tires.
The Company never takes title to or possession of the tires. Occasionally, a customer purchases tires for resale under the circumstances described above. You inquire whether, in such cases, both the Company and the Customer must register as Massachusetts vendors and present resale certificates so that a tax will not be imposed on the sale.
Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property. No one may do business in Massachusetts as a vendor unless a vendor's registration has been issued to him by the Commissioner (c. 64H, s. 7). "Vendor" is defined as "a retailer or other person selling tangible personal property..." (c. 64H, s. 1(18)).
Except in certain instances not here relevant, there is no "sale" within the meaning of Chapter 64H without a transfer of title or possession of tangible personal property (c. 64H, s. 1(12)).
"Sale at retail" does not include sales for resale in the regular course of business (c. 64H, s. 1(13)). The burden of proving that a sale of tangible personal property is not a sale at retail is on the vendor unless he takes a resale certificate in good faith from a purchaser who is a registered vendor engaged in the business of selling tangible personal property and who, at the time of purchasing the property, intends to sell it in the regular course of business or is unable to ascertain whether he will sell it (c. 64H, s. 8).
Based on the foregoing, it is ruled that the Company is not a vendor within the meaning of Chapter 64H, Section 1(18). The Manufacturer must charge the Customer a sales tax on its purchase of the tires unless the Manufacturer takes a resale certificate from the Customer in good faith in accordance with the requirements of Chapter 64H, Section 8.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue
LJH:JXD:mf
LR 81-37