June 13, 1983

You inquire about the Massachusetts sales and use tax treatment of a number of items sold by __________ Corporation to orthodontists and other dentists and to dental laboratories. You also inquire whether sales to non-profit organizations not certified as such by the Commissioner of Revenue are taxable, and whether dental laboratories are considered the consumers of all the supplies they buy and therefore are precluded from giving a resale or exempt use certificate in lieu of paying the tax on their purchases.

The particular items about which you inquire include the following supplies and equipment sold to dental laboratories for use in fabricating crowns and bridgework: gold and other metals and metal alloys, porcelain, artificial teeth, and furnaces and other equipment.

General Laws Chapter 64H, Section 6(r) exempts from sales taxation sales of materials, tools and fuel, or any substitute therefor, which become an ingredient or component part of tangible personal property to be sold or are consumed and used directly and exclusively in an industrial plant in the actual manufacture of tangible personal property to be sold. Chapter 64H, Section 6(s) exempts from sales taxation sales of machinery or replacement parts thereof used directly and exclusively in an industrial plant in the actual manufacture, conversion or processing of tangible personal property to be sold. For purposes of paragraphs (r) and (s) of Section 6, "industrial plant" means a factory at a fixed location primarily engaged in the manufacture, conversion or processing of tangible personal property to be sold in the regular course of business.

Sales for resale in the regular course of business are not subject to the sales tax (G.L. c. 64H, s. 1(13)), but all gross receipts of a vendor are presumed to be from sales subject to tax unless the vendor obtains a Massachusetts resale certificate (Form ST-4) in good faith from the purchaser and the purchaser is a registered Massachusetts vendor (G.L. c. 64H, s. 8).

Chapter 64H, Section 6(e) provides that sales to an organization that is exempt from tax under Internal Revenue Code Section 501(c)(3) are not exempt from the sales tax unless the organization has first obtained a certification from the Commissioner of Revenue stating that it is entitled to such exemption.

Based on the foregoing, it is ruled that:

1. Sales to dental laboratories of gold and other metals and metal alloys, porcelain, and artificial teeth are exempt from the sales and use taxes if the items purchased become ingredient or component parts of tangible personal property to be sold or are purchased for resale in the regular course of business.

2. Sales to dental laboratories of furnaces and other equipment used in fabricating crowns and bridgework are subject to the sales or use tax.

3. Sales to a non-profit organization are not exempt from the sales and use taxes under Section 6(e) of Chapter 64H unless the organization has first obtained a certification from the Commissioner of Revenue (Form ST-2) that it is entitled to exemption.

4. A dental laboratory that is registered as a Massachusetts vendor may give a resale certificate (Form ST-4) in lieu of paying a tax when purchasing tangible personal property that it will resell in the regular course of business. A dental laboratory may give an exempt use certificate (Form ST-12) in lieu of paying a tax when purchasing items that will become ingredient or component parts of tangible personal property to be sold.

The Department of Revenue is presently preparing a revision of Sales and Use Tax Bureau Memo No. 2 ("Dental Equipment and Supplies"), issued August 3, 1966. The revision will set forth in the form of a technical information release the Department's position on the sales taxation of dental equipment and supplies, including the rest of the items about which you have inquired.

Very truly yours,

/s/Ira A. Jackson

Ira A. Jackson

Commissioner of Revenue

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LR 83-47