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Letter Ruling

Letter Ruling Letter Ruling 08-10: Room Occupancy; Federally Sponsored Corporation

Date: 06/06/2008
Organization: Massachusetts Department of Revenue
Referenced Sources: Massachusetts General Laws


June 6, 2008



You have requested a Letter Ruling confirming that the Massachusetts room occupancy excise, G.L. c. 64G, does not apply to stays in hotel rooms by the ****************************************** and its employees. You intend to distribute the ruling to Massachusetts operators and vendors from whom ************ rents guest rooms in order to simplify the process of claiming your exemption.

Chapter 64G of the General Laws imposes an excise on the transfer of occupancy of any room or rooms in a bed and breakfast establishment, hotel, lodging house, or motel in this Commonwealth by any operator. Id., § 3 . Exemptions from the excise are set out in G.L. c. 64G, § 2, and as these do not include an exemption for transfers to organizations such as *************, the excise applies to these transfers, unless they are otherwise exempt.

Under the Supremacy Clause of the United States Constitution, U.S. Const. Art. VI, sec. 2, federal law takes precedence over conflicting state law dealing with the same subject matter. As a result, a Massachusetts tax statute cannot be enforced in the face of clear federal law requiring another result. See e.g.Ace Property & Casualty Insur. Co. v. Commissioner of Revenue, 2002 Mass. LEXIS 407 (June 28, 2002). Here, *********** is a government-sponsored enterprise, chartered under *****************, and ************************, the Corporation is exempt "from all taxation now or hereafter imposed . . . by any state, county, municipal or local taxing authority. . ." except for taxes on real property. Id. As this statute clearly exempts ************************ from all taxes except property taxes, the c. 64G excise cannot be imposed on transfers of occupancy to ***********. 

The Commissioner has issued prior guidance dealing with exemptions such as the one at issue. In this case, the Commissioner will use the same substantiation procedures and evidence for the Corporation and its employees as those set forth in DD 03-7, whether for federal employees who use cards where the government is billed directly, or for federal employees who themselves pay for the occupancy and are later reimbursed by the government. Id. Operators of establishments subject to the excise must retain documentation sufficient to substantiate any claim for exemption from G.L. c. 64G.

Very truly yours,

/s/ Navjeet K. Bal

Navjeet K. Bal
Commissioner of Revenue


LR 08-10



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