Chapter 90 of the General Laws was recently amended by Section 85 of Chapter 184 of the Acts of 2002, effective July 1, 2002. The legislation is designed to prevent evasion of sales/use tax and the local motor vehicle excise by individuals who improperly register a motor vehicle in another state, or misrepresent the principal place of garaging of a motor vehicle within Massachusetts. The new law may be enforced by the Department of Revenue, the Registry of Motor Vehicles, local Boards of Assessors, and state and local police. The presence of any of the criteria listed below creates a prima facie case that the owner of a motor vehicle is a resident of Massachusetts, that the vehicle should be registered in Massachusetts and, for local excise purposes, garaged at the address contained in the referenced records. Improper registration of a motor vehicle or misrepresentation of the place of garaging may subject an individual to substantial fines. Evidence that would rebut these presumptions may be submitted in a timely filed abatement application following assessment of a tax, or in the District Court following prosecution by state or local law enforcement authorities.

A new section 3 1/2 of Chapter 90 deems any person to be a resident of Massachusetts for purposes of (a) registering or insuring a motor vehicle, and (b) imposing the sales or use tax or the local excise on a motor vehicle, during any period during which the person has done any of the following:

(1) obtained a statutory exemption for local property tax purposes provided in G.L. c. 59, § 5, for certain individuals domiciled in Massachusetts, based on age, ownership or other qualifying factors;[ 1]

(2) claimed the residential exemption for local real estate taxes provided by G.L. c. 59, § 5C;|

(3) filed a Massachusetts resident personal income tax return;

(4) obtained a rental deduction on his or her Massachusetts personal income tax return;

(5) declared in a home mortgage settlement document that the mortgaged property located in Massachusetts would be occupied as his or her principal residence; [ 2]

(6) obtained homeowner's liability insurance coverage on property that was declared to be occupied as a principal residence;

(7) filed a certificate of residency and identified his or her place of residence in a city or town in Massachusetts in order to comply with a residency ordinance as a prerequisite for employment with a governmental entity;

(8) paid on his or her own behalf, or on behalf of a child or dependent for whom the person has custody, resident in-state tuition rates to attend a state sponsored college, community college or university;

(9) applied for and received public assistance from Massachusetts for himself or herself or a child or dependent of whom he or she has custody;

(10) has a child or dependent of whom he or she has custody who is enrolled in a public school in a city or town in Massachusetts, unless the cost of such education is paid for by him, such child or dependent, or by another educational jurisdiction;

(11) is registered to vote in Massachusetts;

(12) obtained any benefit, exemption, deduction, entitlement, license, permit or privilege by claiming principal residence in Massachusetts; or

(13) is a resident for Massachusetts personal income tax purposes under the criteria established by G.L. c. 62, § 1(f) and TIR 95-7.

The new statutory provision also gives the Registrar of Motor Vehicles, the Commissioner of Revenue, a local Board of Assessors or any local or state police officer the right to obtain records and information related to the foregoing criteria for the purposes of enforcing local property taxes, the motor vehicle excise, or sales and use taxes. With respect to requests to the Commissioner of Revenue regarding information referred to in criteria (3) and (4), the information released is limited to the taxpayer's name; the taxpayer's primary place of residence or domicile; the type of return filed; the taxpayer identification number; the determination of whether the taxpayer took the rental deduction on his income tax return; and an explanation of the factors that indicated said taxpayer's residency within Massachusetts.

The new law provides that any person who improperly registers a motor vehicle or trailer in another state or misrepresents the place of garaging of the motor vehicle or trailer within Massachusetts, for purposes of evading the payment of motor vehicle excise, sales and use taxes or insurance premiums, or to reduce the amount of such payment, shall be punishable by a fine of not less than $200 nor more than $1,000 for each offense. For purposes of this section, each taxable year that a motor vehicle or trailer is improperly registered is considered a separate offense, but no more than 3 years shall be the subject of prosecution by state or local law enforcement authorities.

Upon receipt of records or information that create a prima facie case that an individual is a resident under the provisions of G.L. c. 90, § 3 1/2, the Department of Revenue will assess unpaid sales or use tax on motor vehicles along with applicable penalties and interest, first giving notice of its intention to assess, in accordance with the tax administration provisions of G.L c. 62C.

[1] See G.L. c. 59, § 5, Clauses Seventeenth, Seventeenth C, Seventeenth C 1/2, Seventeenth D, (surviving spouse and minor with deceased parent and certain senior citizens), Eighteenth (hardship due to age, financial condition and illness or change to active military status), Twenty-second, Twenty-second A, Twenty-second B, Twenty-second C, Twenty-second D, Twenty-second E (certain veterans and spouses, disabled veterans, and spouses of deceased veterans), Thirty-seventh, Thirty-seventh A (blind resident), Forty-first, Forty-first A, Forty-first B, Forty-first C (certain senior citizens), Forty-second or Forty-third (surviving spouse or surviving minor children of police officer or firefighter killed in the line of duty). [ return to text]

[2] For purposes of criterion (5), the period during which a prima facie case is established is limited to one year following the date of execution of a mortgage settlement document in which a person declares the mortgaged property in Massachusetts to be his or her principal residence. [ return to text]

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/s/ Alan LeBovidge
Alan LeBovidge
Commissioner of Revenue

AL:DMS:ecl
142549

November 27, 2002

TIR 02-23