October 27, 1982

********** ("Company") is developing a computerized invoicing system to be used in connection with the sale, lease, rental, installation, maintenance and repair of computer products. You inquire whether the sales price of such products on which the sales and use taxes are based will include the following amounts:

(1) separately-stated charges for transportation of the products to customers;

(2) separately-stated interest, finance, and carrying charges imposed if a customer does not pay for a product within 30 days;

(3) trade discounts set forth in the contract of sale between the Company and its customer and separately stated on the invoice sent to the customer; and

(4) separately-stated amounts representing the value of old products traded in on the sale of new products.

General Laws Chapter 64H, Section 1(14) defines "sales price" as the total amount paid by a purchaser to a vendor as consideration for a retail sale. Section 1(14)(c) of Chapter 64H provides that, in determining the sales price, the following are excluded: "(i) cash discounts allowed and taken on sales; [and] (v) transportation charges separately stated, if the transportation occurs after the sale of the property is made."

Except with respect to sales by a dealer of motor vehicles, trailers, boats or airplanes, no deduction may be taken for trade-in allowances in determining the sales price of property (G.L. c. 64H, ss. 26 and 27; G.L. c. 64I, ss. 27 and 28).

Based on the foregoing, it is ruled that:

1. The Company's separately-stated charges for transporting computer products are not subject to tax if the transportation takes place after the sale of the products is made.

2. The separately-stated interest, finance and carrying charges imposed by the Company if a customer does not pay for a product within 30 days are not subject to tax.

3. The trade discounts set forth in the contract between the Company and its customer and separately stated on the invoice sent to the customer are not subject to tax.

4. Separately-stated amounts representing the value of old computer products traded in on the sale of new products are included in the sales price subject to tax.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers

Commissioner of Revenue

LR 82-99