TIR 01-21 supersedes LR 80-79 and modifies TIRs 99-9 and 98-1 and LR 82-18.
This Technical Information Release (TIR) announces the Department's position with respect to the application of the room occupancy tax to transfers of occupancy by non-military federal employees who pay for rooms and are later reimbursed. If a federal employee or other federal governmental officer [herein "federal employee"] is acting within the scope of his or her official duties (as an employee or other agent) for the federal government, agency or branch of the military [herein "federal government"] and in that capacity stays in a hotel, motel or other place of public accommodation, that occupancy is exempt from room occupancy excise under G.L. c. 64G. To the extent the rules of this TIR are inconsistent with TIRs 99-9 and 98-1 and Letter Rulings 80-79 and 82-18, this TIR supercedes those rulings.
Except as provided for military personnel in G.L. c. 64G, § 12, there is no exemption from the room occupancy excise under G.L. c. 64G for federal employees unless the credit of the United States Government is bound. An agent of the U.S. Government can bind the credit of the U. S. Government. U.S. v. New Mexico, 455 U.S. 720 (1982). Under Hart and McGinley v. Commissioner of Revenue, Appellate Tax Board, Docket No. F233702 (1998) and Araserve, Inc. v. Commissioner of Revenue, Appellate Tax Board, Docket No. 223264 (1998), purchases of tangible personal property by a non-exempt party on behalf of the government, when the government or its agencies are otherwise exempt, are exempt from tax if the purchaser is acting as the agent or an employee of the government. (1) See TIRs 99-4 and 99-21.
The Department will look to Massachusetts law when determining if an employment or other agency relationship exists. For the purposes of making this determination, the Department will accept substantiation as provided in this TIR as evidence of the employment or other agency relationship. If the Department finds that an employment or other agency relationship with the federal government exists, then a transfer of occupancy otherwise subject to tax under G.L. c. 64G will be exempt provided that the requirements of this TIR are met. The exemption is available whether the federal government pays directly for the room, or the employee pays for the room and is later reimbursed.
In order to substantiate a claim for exemption under G.L. c. 64G where the federal employee occupying the room is paying the bill, the employee/occupant must provide the operator of a hotel, lodging house, or motel with:
a) proof of identification that the occupant is an employee or agent of the federal government, and
b) proof that the occupant is traveling at the direction of the federal government during the period of occupancy.
Evidence that the occupant is an employee or agent of the federal government may include such documentation as an official identification card issued by the appropriate branch of government. Evidence that the occupant is traveling at the direction of the federal government may include such documentation as an affidavit, letter, or other attestation on official stationery, signed by an authorized official of the appropriate governmental office, agency or branch of the military indicating that the employee is traveling at the direction of the government during the period of occupancy.
Operators of hotels, motels or other places of public accommodation must retain copies of this documentation in order to substantiate claims for exemption under G.L. c. 64G.
This TIR supersedes any previously announced position by the Department to the extent that such position is inconsistent with this TIR. This TIR is retroactive with respect to all open tax periods. See 830 CMR 62C.3.1(7)(f).
/s/Bernard F. Crowley, Jr.
Bernard F. Crowley, Jr.
Acting Commissioner of Revenue
December 20, 2001
1. But see PPC Constructors, Inc. v. Commissioner of Revenue, Appellate Tax Board, Docket No. F251047 (2001) where a contractor was deemed not to be a government agent