May 25, 1982

********** Inc. ("Company") is a clinical laboratory that is based in Connecticut but also performs laboratory analyses in Massachusetts. The Company, which is not registered as a Massachusetts vendor, recently purchased medical equipment from a Massachusetts supplier, and leased it in turn to a Massachusetts customer. The supplier delivered the equipment directly to the customer in Massachusetts. This was the first time that the Company has acted as a lessor of tangible personal property in Massachusetts. You inquire about the Massachusetts sales and use tax treatment of this transaction.

From the fact that the Company performs laboratory analyses in Massachusetts, it is assumed that the Company owns or leases real property in Massachusetts, or has one or more employees whose service is performed entirely in Massachusetts or who, in the performance of service both within and without Massachusetts, regularly commence their activities at, and return to, a place within the Commonwealth.

Every vendor engaged in business in Massachusetts must collect and pay over sales and use taxes on (1) its retail sales of tangi­ble personal property in Massachusetts; and (2) its retail 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.

"Sale at retail" is defined in Chapter 64H, Section 1(13) as a sale of tangible personal property for any purpose other than resale in the regular course of business.

Section 7 of Chapter 64H provides that no person shall do business in Massachusetts as a vendor unless a Massachusetts vendor's registration shall have been issued to him for each place of business.

"Engaged in business" includes "commencing, conducting or continuing in business" (G.L. c. 64H, s. 1(4)). "Engaged in business in Massachusetts" includes having a business location in Massachusetts, and a person is considered to have a business location in Massachusetts if, inter alia, he owns or leases real property in Massachusetts or has one or more employees whose service is performed entirely within Massachusetts or who, in the performance of service both within and without Massachusetts, regularly commence their activities at, and return to, a place within Massachusetts (G.L. c. 64H, s. 1(5)).

Based on the foregoing, it is ruled that the Company must register as a Massachusetts vendor and collect and pay over sales or use taxes on its lease of the equipment to its Massachusetts customer. If the Company paid a Massachusetts sales or use tax on its purchase of the equipment for resale, the vendor or vendors of the equipment may refund the tax collected on the purchase to the Company and apply for an abatement of the tax, or the Company may apply for an abatement, acting under power of attorney from the vendor or vendors.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

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LR 82-57