June 3, 1985


You ask whether the sales of small boats and outboard motors to commercial clam diggers are subject to the Massachusetts sales tax.

Massachusetts law imposes a five percent sales tax on all retail sales of tangible personal property in Massachusetts unless otherwise exempt. (G.L. c. 64H, §2). Specifically exempt from the sales tax are "...sales of vessels used directly and exclusively in commercial fishing, machinery and equipment therefor and replacement parts for such vessels, machinery and equipment." (G.L. c. 64H, § 6(o)).

All gross receipts of a vendor from Massachusetts sales of tangible personal property are presumed to be from sales subject to tax until the contrary is established. (G.L. c. 64H, § 8 (a)). Therefore, a vendor is generally required to collect and pay over sales tax upon the sale of a boat or outboard motor.
If tangible personal property is purchased by a person who will use it in a manner that exempts it from the sales tax, he may give an exempt use certificate (Form ST-12) to the vendor, certifying that the property will be so used. (G.L. c. 64H, § 8(f)).

Accordingly, the vendor may accept an exempt use certificate in lieu of collecting the sales tax on sales of boats or outboard motors to be used directly and exclusively in commercial fishing. However, if the vendor has knowledge of facts that give rise to a reasonable inference that the boat or outboard will not be used directly and exclusively in commercial fishing, but rather in some other activity (as, for example, in recreational boating or sport fishing), the vendor may not accept an exempt use certificate and must collect and pay over the tax on the sale of the items; this is so even if the purchaser holds a commercial fishing license.

Very truly yours,

Ira A. Jackson
Commissioner of Revenue

IAJ:SFR:loc

LR 85-53