Massachusetts Sales Tax Guide for Plumbers

This guide provides some general information on tax issues specific to plumbers and resources for registering, filing returns and making payments.

Posted: August 17, 2023

Guide Disclaimer

This guide is not intended to be used as a legal ruling, but merely as a general guide for sales and use taxes as they relate to plumbers. Not every tax situation is covered in this guide. If you have questions about the taxes on the goods or services you provide, see the “Contact” section of this guide.

Overview

Generally, plumbers act as contractors when they perform:

• Construction
• Reconstruction
• Alteration
• Improvement
• Remodeling or
• Repair of real property

and are the consumers of tangible personal property (material) purchased by them for the performance of their contracts. In this case, they are required to pay sales or use tax as consumers on the total price of the material purchased at the time of purchase, unless the purchase is exempt from tax.

There are several exemptions from tax that may apply depending on whether the material is:

• Purchased for an entity that is exempt from tax or
• Used in an exempt manner. 

If a plumber does not pay sales tax at the time of sale and the material is subject to tax, the plumber must:

• Self-assess a use tax on the cost of the material and
• Remit the tax to the Department of Revenue (DOR). 

Where a plumber agrees to sell material and provide installation services for a separate price, the plumber is:

• Acting as a vendor and
• Required to collect the sales tax based on the price the plumber charges its customer for the materials. 

There are exceptions when plumbers perform contracts for organizations that are exempt from sales tax under G.L. c. 64H, Section 6(d) and/or Section 6(e). 

There is also an exemption for plumbers purchasing building materials and supplies to be used on certain projects qualifying for sales tax exemption under G.L. c. 64H, Section 6(f) which is discussed below.

There are also exceptions when plumbers purchase materials that are used in an exempt manner from sales tax under G.L. c. 64H, Section 6(r) and Section 6(s).

Examples of Plumbing Contracts

• A plumber is awarded a contract to install plumbing fixtures for a customer. The plumber is considered the consumer of all the material goods and sales or use tax is due on the total sales price paid to the vendor(s) for material.
• A customer hires a plumber under a contract to install a plumbing system in a building. The plumber is considered the consumer of all material purchased to perform the services for which he or she was hired and sales or use tax is due on the total price paid to the vendor(s).

Examples of Taxable Purchases Made by Plumbers when Performing Contracts

Plumbers pay sales tax on materials purchased to be used in fulfilling their contracts. Some examples of the purchases are:

• Toilets/Bidets
• Bathtubs
• Whirlpools
• Garbage disposals
• Kitchen/Bathroom sinks                                            
• Showers and shower faucets
• Water Heaters/Boilers                                                
• Pipes and fittings
• Washers, nuts, bolts, screws
• Sealants, caulking.

The above list is not meant to be complete.

Plumbers acting as contractors do not provide resale certificates for the purchase of material to be incorporated into taxable projects. However, exemption certificates may be issued for material purchased on behalf of exempt entities or used in an exempt manner.

For more information, see the Certificates Needed to Claim Exemption.

Purchases and Rentals of Tools of the Trade Made by Plumbers

Plumbers are the consumers of the tools of the trade purchased and/or rented by them. They are responsible for paying sales tax on the total purchase/rental price at the time of sale.

Some examples of these purchases are:

• Propane torch
• Pipe cutter and threader
• Sewer camera
• Pipe benders
• Wrenches
• Gas leak testing equipment
• Chemical and/or biologic drain cleaners
• Auger
• Pipe reamers.

 The above list is not meant to be complete.        

If a plumber is renting tools or equipment that relate to a contract for a customer that is exempt from the tax, these rentals are exempt from tax. If a plumber purchases tools or equipment for an exempt contract, these purchases are taxable.

Customers that are tax exempt include:

• Government organizations
• Public schools
• 501(c)(3) organizations or
• Other exempt entities such as:
  • Private schools or
  • Scout Troops.

For more information, see the Exemptions section of this guide.

Plumbers as Vendors

There are situations where, instead of acting as a contractor, a plumber can act as a vendor.

A plumber is considered to be acting as a vendor if the plumber

• Sells material and also
• Provides the service of simply installing a complete unit of standard equipment, applying or connecting the material he or she is selling without substantial fabrication.

When plumbers purchase material that will be resold to their customers, plumbers should present a resale certificate, Form ST-4, to their vendor at the time the material is purchased. 

For more information, see Certificates Needed to Claim Exemption section below.

A plumber who furnishes and installs material where the customer’s real object of the transaction is to acquire the material is considered to be a vendor of that material. The plumber must collect sales tax on the sales price of the material sold to the customer.

See Massachusetts Regulation 830 CMR 64H.1.1, Service Enterprises.

Examples of Tangible Personal Property Utilized in Vendor sales:

1. A plumber is hired to replace a broken faucet by a customer. The plumber separately states the price of the faucet and the labor charge. The sales tax is due on the price of the faucet as sold to the customer. The charge for the labor is not subject to tax. In this example, the plumber may give a resale certificate to its own vendor when it purchases the faucet. If the plumber does not separately state the charge for the faucet, the entire combined charge is taxable to the customer if the value of the material (a faucet) is more than 10% (consequential) in relation to the total charge.
2. A plumber is hired to fix a leaking fixture and uses materials he or she has already purchased to complete the repair. The customer is billed a lump sum amount for the repair. No tax is due on the total charge as the materials are not separately stated. In this instance, the plumber is acting as a service provider. A plumber providing services is the consumer of the materials used and as such pays the sales tax to their supplier.

Examples of Taxable Sales of Plumbing Material

1. A customer buys a toilet from a plumbing supplier/contractor. He pays for the toilet and picks up the toilet from the plumbing vendor/contractor. The sales tax is due on the total sales price of the toilet.
2. A customer buys a water heater from a plumbing supplier/contractor. In addition, the customer contracts with the plumber to remove the water heater and install the new water heater. The tax is due on the total sales price of the water heater. The installation charges are not subject to tax if they are separately stated. If the installation charges are not separately stated, tax is due on the total sales price.

830 CMR 64H.1.1: Service Enterprises 

Exemptions

Plumbers Performing Contracts for Customers Exempt from Sales Tax Under G.L. 64H, Section 6(d) and/or Section 6(e).

There may be times when a plumber is hired to perform plumbing services for customers who are exempt from paying sales tax under G.L. c. 64H, Section 6(d) and/or Section 6(e).

Customers that are exempt may include:

• The U.S. Government
• The Commonwealth of Massachusetts
• A Massachusetts state agency
  • or their agents
• Religious, charitable, scientific, literary, and educational organizations or
• Other similar 501(c)(3) non-profit organizations.

Plumbers Purchasing Building Materials and Supplies to Be Used on Certain Projects Qualifying for Sales Tax Exemption Under G.L. c. 64H, Section 6(f).

There may be times when a plumber is hired to perform plumbing services for customers who are working on projects for

• The U.S. Government
• The Commonwealth of Massachusetts
• A Massachusetts state agency
  • or their agents
• Religious, charitable, scientific, literary, and educational organizations or
  • other similar 501(c)(3) non-profit organizations.

Purchases of building materials and supplies if consumed or incorporated in the performance of these projects that involve the

• Construction
• Reconstruction
• Alteration
• Remodeling or
• Repair

of a building, structure, highway, or bridge, etc. for these entities are exempt from sales and use tax.  See G.L. c. 64H, Section 6(f). Plumbers purchasing qualifying materials may do so by presenting a properly completed Contractor’s Exempt Use Certificate, Form ST-5C, and if applicable, Form ST-2, to the vendor at the time of purchase.

Plumbers Purchasing Material for Certain Uses Qualifying for Sales Tax Exemptions Under G.L. 64H, Section 6(r) and/or Section 6(s).

Exemptions Under G.L. 64H, Section 6(r) and/or Section 6(s).

There may be times when a plumber is hired to perform plumbing services for customers such as

• Qualified manufacturers or
• Research and development corporations

and the materials they purchase are used in a manner that exempts the material from sales tax.

Examples of use-based exemptions

1. Under G.L. c. 64H, Section 6(r), sales of

• Material
• Tools
• Fuels or
• Any substitute therefor

are exempt from sales tax if the material, tools or fuel

• Become an ingredient or component part of tangible personal property to be sold; or
• Are consumed and used directly and exclusively in:
  • Agricultural production
  • Commercial fishing
  • An industrial plant in the actual manufacture of tangible personal property to be sold, including the publishing of a newspaper
  • The operation of commercial radio broadcasting or television transmission
  • The furnishing of power to an industrial manufacturing plant
  • The furnishing of gas, water, steam or electricity when delivered to consumers through mains, lines or pipes
  • The production of animals for research, testing, or other purposes relating to the promotion or maintenance of the health, safety or well being of human beings or animals; or
  • Research and development by a manufacturing corporation.

2. Section 6(s) likewise exempts sales of machinery or replacement parts thereof used in substantially the same manner as the material, tools and fuels covered by Section 6(r). With a few exceptions not important here, material exempt from sales tax are also exempt from use tax. G.L. c. 64I, Section 7 b).

Plumbers (and other entities, or other contractors or subcontractors), may purchase material covered by the sales tax exemptions in G.L. c. 64H, Section 6(r) and Section 6(s) tax free provided that the purchased material will be used in the manner specified by the statute (as listed above). Plumbers purchasing qualifying material may do so by presenting an exempt use certificate, Form ST-12, to the vendor. Plumbers purchasing such material will be required to prove during an audit that the material purchased was used in the manner stated on the exempt certificate.  If the materials do not qualify for exemption, the plumber will be liable for the tax. See DOR Directive 07-6. 

Examples of Exempt Purchases Made by Plumbers When Performing Services for Entities Qualifying for Sales Tax Exemptions Under G.L. 64H, Section 6 (r) and/or Section 6 (s). 

1. A plumber is hired to install various manufacturing machinery located at a company’s manufacturing plant. The company provides the plumber with a validly executed, properly completed exempt use certificate (Form ST-12) for the plumber to purchase material that is needed to perform the services. The plumber may present the Form ST-12 to the vendor(s) in order to avoid being charged sales tax.
2. The same company hires the plumber to replace piping and plumbing fixtures in its accounting office adjacent to its manufacturing area. Once again, the company provides the plumber with a validly executed, properly completed exempt use certificate (Form ST-12) for the plumber to purchase material that is needed to perform the services. In this instance, if the plumber presented the Form ST-12 to the vendor(s) in order to avoid being charged sales tax, the plumber would be required to prove on audit that the material purchased were used in an exempt manner. If it was determined that the material did not qualify for the exemption (because the accounting office is not part of the exempt manufacturing area, for example), the plumber would be liable for the tax.
3. A research and development corporation awards a contract to a plumber to perform plumbing work that will connect all of its laboratory equipment to its water or Heating, Ventilation, Air Condition (HVAC) service. The corporation provides the plumber with a validly executed, properly completed exempt use certificate (Form ST-12) for the plumber to purchase material that is required to complete the work. The plumber may present the Form ST-12 to the vendor(s) in order to avoid being charged sales tax.

Contractor's Sales Tax Exemptions

Under G.L. Ch. 64H sec. 6(f) building materials and supplies, purchases by a contractor or subcontractor of building materials and supplies that are consumed or incorporated  in the performance of a contract for the:

• Construction
• Reconstruction
• Alteration
• Remodeling or
• Repair of a building or structure

for a governmental body or agency or a for a certificated IRC Section 501(c)(3) exemption organization are exempt. The contractor must present to its vendor a ST-5C and ST-2 from the 501 (c)(3) organization.

Certificates Needed to Claim Exemption

1. Certificate of Exemption (Form ST-2). Exempt organizations register with the Department of Revenue and are issued a Form ST-2. When presented with an Exemption Certificate (Form ST-5) for purchasing material for use in the conduct of their business, the Form ST-2 must be in effect and not expired at the time of purchase.
2. Sales Tax Resale Certificate (Form ST-4). When a plumber acts as a vendor and purchases material for resale, the plumber must provide a completed copy of a Form ST-4, Sales Tax Resale Certificate, to the vendor instead of paying sales tax. Sales tax will be due when the vendor sells the tangible personal property to the ultimate consumer of the goods.
3. Sales Tax Exempt Purchaser Certificate (Form ST-5). When an exempt organization purchases material for use in the conduct of its business, it will provide a completed copy of a ST-5, Sales Tax Exempt Purchaser Certificate. Government organizations (public schools, city/town government, state agency, etc.) should attach a copy of their Form ST-2, if available (see #1). Exempt organizations (501(c)(3) organizations such as private schools, Scout troops, etc.) must also attach a copy of their Form ST-2.
4. Contractor’s Sales Tax Exempt Purchase Certificate (Form ST-5C). Where a plumber is acting as a contractor or subcontractor performing construction services on behalf of a customer claiming a sales tax exemption under G.L c. 64H section 6(d), 6(e), 6(f),  he plumber must provide a completed Form ST-5C to their vendor when purchasing material used pursuant to the contract.
5. Exempt Use Certificate (Form ST-12).  A plumber may provide Form ST-12 to the vendor when purchasing material which is to be used in an exempt manner as provided by G.L. c. 64H, Section 6(r) and Section 6(s).

For additional information about the rules for exemption certificates, see Massachusetts Regulation 830 CMR 64H.8.1, Resale and Exempt Use Certificates. For more details, see the More Info below.

Other Tax Obligations

The above information provides some general sales and use tax information for this specific industry, but this guide isn't intended to provide a complete discussion of the sales/use tax requirements for this industry. A business operating in Massachusetts may have other tax obligations, such as income tax, corporate excise and/or withholding tax.

Register your business and file and pay your business taxes on MassTaxConnect.

For more information concerning Massachusetts state business taxes including sales/use tax, visit Business Taxes or contact DOR. 

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More Info

• GL c 64H § 1: Definitions: Sales Price (if installation charges are not separately stated, they are included in the sales price of the faucet and are subject to sales tax. 
• GL c 64H § 2: Excise imposed on sales at retail by vendor of tangible personal property
• GL c. 64H § 6(d), 6(e), 6(f) 6(r) & 6(s)
• 830 CMR 64H.1.1 Service Enterprises
• 830 CMR 64H.8.1 Resale and Exempt Certificates
• 830 CMR 62C.25.1 Record Retention
• DOR Directive 07-6
• Letter Ruling 79-46:  Massachusetts Contractor with Out-of-State Customers (contractors, consumers of materials used)
• Letter Ruling 85-34: Sales to 501(c)(3) Organizations
• Letter Ruling 85-25:  Water softeners
• Letter Ruling 83-34:  Repair and Rebuilding of Industrial Process Boilers
• See Ace Heating, 371 Mass. 256-57

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