October 27, 1981

********** ("Company") is engaged in the business of producing and selling videotape cassette recordings of home and office interiors. The purchaser of a cassette keeps it as an inventory of the contents of his home or office to facilitate recovery of insurance proceeds in the event of a loss.

In billing for a cassette, the Company breaks our separate amounts for the cost of the blank cassette and for "labor" associated with production of the finished recording. You inquire whether both components of the charge are subject to tax.

The Massachusetts sales tax is an excise imposed upon retail sales of tangible personal property at the rate of five per cent of a vendor's "gross receipts," that is, five per cent of the total sales price received by the vendor as consideration for retail sales (G.L. c. 64H, ss. 1(6), 2).

The "sales price" is defined in Chapter 64H as the total amount paid by a purchaser to a vendor as consideration for a retail sale; no deduction may be taken on account of "the cost of materials used, labor or service cost,...or other expenses" (G.L. c. 64H, s. 1(14)).

Based on the foregoing, it is ruled that the Company's total charge for the videotape cassette recording is subject to tax, whether or not components of the charge are separately stated.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

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LR 81-94