May 24, 1982
The ********** Sewer Commission intends to engage a private contractor to operate a secondary wastewater treatment facility owned by the City of **********. The facility was constructed with federal, state and city funds. You inquire whether the contractor's purchases of chemicals, equipment and other tangible personal property for use in the operation of the facility will be subject to the sales tax.
General Laws Chapter 64H, Section 6(d) exempts from taxation sales to the United States, the Commonwealth of Massachusetts or any political subdivision thereof, or their respective agencies. A purchaser is an "agency" for purposes of this provision only if it is a regularly constituted department of government or an entity wholly owned by the government and exercising exclusively governmental functions. First Agricultural National Bank v. State Tax Commission, 353 Mass. 172 (1967) (reversed on other grounds, 392 U.S. 339 (1968)).
Based on the foregoing, it is ruled that the Contractor's purchases of chemicals, equipment and other tangible personal property for use by him in the operation of the city-owned facility will be subject to the sales tax.
Very truly yours,
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue