December 12, 1983

You request a ruling as to the application of the Massachusetts sales tax to sales by ********** ("Company").

You state that the Company compiles product and market information for firms in the computer industries. The information is analyzed, edited, and stored in data files. Periodically, the Company's customers receive reports based on the product, market, and general business subjects which they have selected. The customers' reports are assembled by the Company's computer system, based on each customer's particular program. The fees to the customers for the reports vary with the amount of data to be covered in each customer's reports. At the present, no customers receive reports identical to those of any other customer.

Chapter 64H, Section 2 of the General Laws imposes a sales tax on all retail sales of tangible personal property in Massachusetts unless otherwise exempted. A sale is any transfer of title or possession of tangible personal property for consideration. (G.L. c. 64H, § 1(12)(a)). A sale is further defined as

"[t]he furnishing of information by printed, mimeographed or multigraphed matter or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons, but excluding the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons, and excluding the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, radio broadcasters and television broadcasters in the collection and dissemination of news." (G.L. c. 64H, § 1(12)(f)).

In Commissioner of Revenue v. McGraw-Hill, Inc., 1981 Mass. Adv. Sh. 957, 420 N.E. 2d 293 (1981), the Supreme Judicial Court held that the furnishing of information bulletins to subscribers in the construction industry was not within the definition of a "sale." The bulletins were comprised of individual slips of paper containing information about single construction projects. The slips were periodically assembled, collated, and sent to subscribers based on each subscriber's "Market Profile." Id. at 958-59, 420 N.E. 2d at 294. The Court held that the furnished information was individual to each subscriber, only valuable after the selection process. Id. at 962, 420 N.E. 2d at 296. The Court also held that the information furnished to subscribers was not substantially incorporated in reports furnished to other subscribers because no subscribers received the same reports as any other subscriber over a long period of time. Id. at 963, 420 N.E. 2d at 296.

Based on the foregoing, it is ruled that the Company's charges for the furnishing of individualized product and market information are not subject to the sales tax.

Very truly yours,

/s/Ira A. Jackson

Ira A. Jackson
Commissioner of Revenue

IAJ:JES:mf

LR 83-98