June 5, 1981

You inquire whether the Massachusetts sales or use taxes apply to purchases by ********** ("Company") of dishwashers, grills, and other similar items of equipment, from sellers located outside Massachusetts. The Company operates a chain of restaurants located within and without Massachusetts. The items are delivered to the Company's Massachusetts warehouse by common carrier. The Company does not assume the risk of loss of the items until they are unloaded in Massachusetts. The items are kept in the warehouse in their shipping cartons until the Company delivers them to the restaurants in which they will be used.

Massachusetts General Laws Chapter 64H, Section 2 imposes an excise on sales at retail of tangible personal property by any vendor. Every vendor engaged in business in Massachusetts must collect and pay over to the Commissioner the sales tax on his sales in Massachusetts (G.L. c. 64H, ss. 2, 3).

Chapter 64I, Section 2 imposes an excise on the storage, use or other consumption in Massachusetts of tangible personal property purchased from any vendor for storage, use or other consumption in Massachusetts. Every vendor engaged in business in Massachusetts must collect and pay over the use tax on the use in Massachusetts of tangible personal property he has sold for storage, use or other consumption in Massachusetts (G.L. c. 64I, ss. 2, 4). Where the use tax is not collected by the vendor, the person storing, using or otherwise consuming the property in Massachusetts is liable for the tax (G.L. c. 64I, s. 3).

"Storage" and "use" do not include the keeping, retaining, or exercising any right or power over tangible personal property for the purpose of subsequently transporting it outside Massachusetts for use thereafter solely outside Massachusetts (G.L. c. 64I, s. 1). Moreover, the use tax does not apply to sales upon which the sales tax has been collected (G.L. c. 64I, s. 7(a)).

No person may do business in Massachusetts as a vendor unless a registration shall have been issued to him by the Commissioner of Revenue for each place of business (G.L. c. 64H, s. 7).

Based on the foregoing, it is ruled that:

(1) If the seller of the items is engaged in business in Massachusetts, he must register as a Massachusetts vendor and collect and pay over the sales tax on his sale of the items to the Company, whether or not the items will be unpacked or otherwise used in Massachusetts.

(2) If the seller is not engaged in business in Massachusetts, the Purchaser must pay the use tax when an item is unpacked for use in Massachusetts; the use tax does not apply to the mere warehousing in Massachusetts of grills, dishwashers and like items that will not be unpacked until they are delivered by the Company outside Massachusetts for use outside the Commonwealth.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers

Commissioner of Revenue

LJH:JXD:mf

LR-48