July 2, 1982
Corporation A and Corporation B are subsidiaries of Parent Corporation, a corporation which was organized outside the United States. Corporation A operates retail stores in Massachusetts and elsewhere. Corporation B will operate a mail-order business from outside Massachusetts. Its only contact with Massachusetts will be the delivery of goods in Massachusetts by United States mail or common carrier, and the solicitation of sales by distribution of catalogs in Massachusetts. The catalogs will be distributed either through the United States mail or at the retail stores of Corporation A. You inquire whether, in these circumstances, Corporation B must register as a Massachusetts vendor and collect and pay over sales and use taxes on its mail-order sales to Massachusetts customers.
No person may do business in Massachusetts as a vendor unless a Massachusetts vendor's registration has been issued to him for each place of business (G.L. c. 64H, s. 7). Furthermore, no person engaged in business as a vendor may sell tangible personal property for storage, use or other consumption in Massachusetts unless such a registration has been issued to him (G.L. c. 64I, s. 9).
"Engaged in business in the Commonwealth" includes "regularly soliciting orders for the sale of tangible personal property by salesmen, solicitors, or representatives in the commonwealth, unless such activity consists solely of solicitation by direct mail or advertising via newspapers, radio or television" (G.L. c. 64H, s. 1(5)).
Based on the foregoing, it is ruled that:
1. If Corporation B's catalogs are distributed at retail stores operated by Corporation A in Massachusetts, Corporation B must register as a Massachusetts vendor and collect and pay over Massachusetts sales and use taxes on its mail-order sales to Massachusetts customers.
2. If Corporation B's catalogs are distributed solely by United States mail, it need not register as a Massachusetts vendor and collect and pay over Massachusetts sales and use taxes.
Very truly your
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue
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