July 2, 1985

Your client is a distributor of medical instruments who intends to ship such instruments into Massachusetts to sell to health practitioners and hospitals. The instruments are to be used in the treatment of pain, particularly pain associated with arthritis. You state that your client plans to send representatives into Massachusetts to solicit orders. The instruments would be delivered to Massachusetts purchasers by means of parcel post.

1. You inquire whether the sales of the instruments will be subject to the Massachusetts sales and use tax.

Massachusetts General Laws Chapter 64H, Section 2 imposes a five percent sales tax on all retail sales of tangible personal property, unless otherwise exempted. A "sale at retail" is a sale for any purpose other than resale in the regular course of business. G.L. c. 64H, § 1(13). Chapter 64H, Section 6(l) exempts from the sales tax.

Sales of medicine, insulin needles and insulin syringes on prescriptions of registered physicians; sales of oxygen, blood or blood plasma; sales of artificial devices individually designed, constructed or altered solely for the use of a particular crippled person so as to become a brace, support, supplement, correction or substitute for the bodily structure including the extremities of the individual; sales of artificial limbs, artificial eyes, hearing aids and other equipment worn as a correction or substitute for any functioning portion of the body; sales of artificial teeth by a dentist and the materials used by a dentist in dental treatment; sales of eyeglasses, when especially designed or prescribed by an ophthalmologist, oculist or optometrist 'for the personal use of the owner or purchaser; sales of crutches and wheel chairs for the use of invalids and crippled persons; and sales of baby oil; and the rental, sales and repairs of kidney dialysis machines, enteral and parenteral feedings, and feeding devices, suction machines, oxygen concentrators, oxygen regulators, oxygen humidifiers, oxygen masks, oxygen cannulas, ultrasonic nebulizers, life sustaining resuscitators, incubators, heart pacemakers, canes, all types of hospital beds for home use, tripod quad canes, breast prosthesis [sic], alternating pressure pad units and patient lifts, when prescribed by a physician. G.L. c. 64H, § 6(l).

Also exempt from the sales tax are:

Sales to any corporation, foundation, organization or institution, which is exempt from taxation under the provisions of section five hundred and one (c)(3) of the Federal Internal Revenue Code, as amended, and in effect for the applicable. period; provided, however, that such sales shall not. be exempt unless (1) the tangible personal property which is the subject of such, sales is used in the conduct of such religious, charitable, educational or scientific enterprise, (2) such corporation, foundation, organization or institution shall have first obtained a certification from the commissioner, stating that it is entitled to such exemption, and (3) the vendor keeps a record of the sales price of each such separate sale, the name of the purchaser, the date of each such separate sale, and the number of such certificate. G.-L. c. 64H, § 6(e).

Sales, of medical instruments are not included in the exemptions of Section 6(l) of Chapter 64H. Therefore, sales of medical instruments for use by health practitioners in the treatment of pain are subject to the Massachusetts sales and use tax. However, the sales of such medical instruments to a health care facility exempt from taxation under Section 501(c)(3) of the Internal Revenue Code are not subject to the sales and use taxes if the items are used in the conduct of the facility's activities, the facility has obtained a certificate from the Commissioner, and your client keeps complete records of such sales.

2. You inquire whether your client is required to collect the sales tax.

Unless a sale is exempted, the sales tax must be collected and paid over by any person who is regularly engaged in business as a vendor in Massachusetts. G.L. c. 64H, §§ 2, 6. A vendor is defined as any person selling tangible personal property the sales of which are taxable. G.L. c. 64H, §1(18). Vendors may not do business in Massachusetts unless registered as such with the Commissioner of the Department of Revenue. G.L. c. 64H,. § 7. A copy of Form TA-1, Application for Registration, is enclosed.

Being "engaged in business" in Massachusetts, for purposes of the sales tax, is defined as:

having a business location in the commonwealth; 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; or regularly engaging in the delivery of property in the commonwealth other than by common carrier or United States mail. G.L. c. 64H, §1(5).

Your client will be engaged in business in Massachusetts by virtue of sending representatives into the state to solicit orders. Therefore, your client should register as a vendor and collect the sales tax from its customers.

Very truly yours

Commissioner of Revenue

IAJ:JES:mf

LR 85-57