Massachusetts General Laws Chapter 64H, Section 6(ii), as added by Section 4 of Chapter 429 of the Acts of 1982, effective January 16, 1983, exempts from the sales tax rental receipts or charges in connection with service contracts between waste service firms and customers for the use, maintenance and repair of refuse containers placed on customers' premises by waste service firms.
Prior to January 6, 1983. Separately stated charges to customers by a waste service firm, however characterized, for the rental of refuse containers or bins under a rubbish removal contract are subject to the Massachusetts sales tax. However, if the charge for the rental of a refuse container is not separately stated from the charge for services by the waste service firm, such as transportation and dumping, the entire charge is not subject to the tax, if the rental value of the refuse container is an inconsequential element of the total charge. The rental value of the container will be considered inconsequential if it is less than 10% of the total charge. The rental value will be determined on a case by case basis.
On and After January 16, 1983. Charges to customers by a waste service firm for the rental of refuse containers or bins placed on the customers' premises under a rubbish removal contract for rental periods beginning on or after January 16, 1983 are exempt from the Massachusetts sales tax. A lump-sum charge by a waste service firm for the rental of containers and for its services, such as transportation and dumping, is not subject to the sales tax.
Purchased of items by a waste service firm which are used to carry out the service contract are taxable. This includes, but is not limited to, the purchase of container, trucks used to transport the rubbish and containers, and parts, paint or materials used to maintain or repair the containers. The waste service firm is the consumer of such items and must pay the sales tax on their purchase.
Joyce Hampers
Commissioner of Revenue

December 16, 1982

TIR 82-5