| Date: | 12/27/1996 |
|---|---|
| Organization: | Massachusetts Department of Revenue |
| Regulatory Authority: | Massachusetts General Laws |
| Official Version: | Published by the Massachusetts Register |
830 CMR: DEPARTMENT OF REVENUE
830 CMR 64H.00: SALES AND USE TAX
830 CMR 64H.00 is repealed and replaced with the following:
830 CMR 64H.25.1: Motor Vehicle
The sale or use of motor vehicles, trailers, and other types of vehicles in Massachusetts is generally subject to the sales or use tax. 830 CMR 64H.25.1 applies the provisions of M.G.L. c. 64H and M.G.L. c. 64I, the Massachusetts sales and use tax statutes, to the sale or use of such vehicles.
When used in 830 CMR 64H.25.1, the following words have the following meanings, unless the context requires otherwise:
Average trade-in price or value, the wholesale or trade-in value which corresponds to a particular make, model, type, and year of a motor vehicle, trailer, or other vehicle, as listed in the most recent edition of the applicable National Automobile Dealers Association (NADA) used vehicle pricing guide or, if specifically agreed upon by the Commissioner and Registrar, any other values or used vehicle pricing guides designated under such agreement.
Business entity, a person or entity regularly engaged in any activity, the object of which is profit or gain, direct or indirect.
Casual and isolated sale or transfer, a sale or transfer at retail of a motor vehicle, trailer, or other vehicle other than a retail sale by a Massachusetts dealer or Massachusetts lessor in the regular course of business.
Commissioner, the Commissioner of Revenue or any person authorized or designated to act on the Commissioner's behalf.
Dealer, a person who is regularly engaged in the business of buying, selling, or exchanging motor vehicles, trailers, or other vehicles.
Finance leasing arrangement, a lease of a motor vehicle, trailer, or other vehicle which qualifies for treatment under and is taxed under the provisions of I.R.C. § 168(f)(8).
Insurer, a person engaged in the business of providing personal casualty, property damage, fire and theft insurance for motor vehicles, trailers, and other vehicles.
Lessor, a person who is regularly engaged in the business of leasing or renting motor vehicles, trailers, or other vehicles.
Massachusetts dealer, a dealer who holds a valid Massachusetts Vendor's Registration Certificate.
Massachusetts lessor, a lessor who holds a valid Massachusetts Vendor's Registration Certificate.
Massachusetts Vendor's Registration Certificate, Department of Revenue Form ST-1, lawfully obtained from and issued by the Commissioner to a dealer or lessor.
Motor Vehicle, a motorized, self-propelled vehicle which is constructed and designed for transportation or travel over a land surface; but not including mopeds, motorized bicycles, or vehicles incapable of speeds in excess of twelve (12) miles per hour which are used other than for transporting persons or property, and are either used exclusively for highway building, repair, or maintenance, or are especially designed for use other than on public highways.
Off-road Vehicle, a motorized, self-propelled vehicle which is not designed for use nor used primarily for transportation or travel on public highways.
Purchaser, a buyer, vendee, lessee, renter, or other person who receives title to or possession of a motor vehicle, trailer, or other vehicle as the result of a sale.
Registrar, the Registrar of Motor Vehicles or any person authorized or designated to act on the Registrar's behalf.
Resale in the regular course of business, a sale, other than a lease or rental, of a motor vehicle, trailer, or other vehicle by a Massachusetts dealer, or a lease or rental of a motor vehicle, trailer, or other vehicle by a Massachusetts lessor, which is the type of sale or lease, whichever is applicable, upon which the dealer or lessor primarily relies in the conduct of its business. Resale includes the use of a vehicle for demonstration or display.
Sale, any transfer of title or possession, or both, by exchange, barter, lease, rental, conditional or otherwise, of a motor vehicle, trailer, or other vehicle for a consideration in any manner or by any means whatsoever.
Sale at retail or retail sale, a sale, lease, or rental of a motor vehicle, trailer, or other vehicle for any purpose other than resale in the regular course of business.
Sales price, the total amount or value paid or exchanged by a purchaser as consideration for the transfer of title to or possession of a motor vehicle, trailer, or other vehicle, whether valued in money or otherwise, less any vehicle manufacturer's excise tax imposed by the United States.
Sales tax, the tax imposed by M.G.L. c. 64H on the retail sale of a motor vehicle, trailer, or other vehicle by a Massachusetts dealer or Massachusetts lessor in the regular course of business.
Seller, a vendor, dealer, lessor, or other person who transfers title to or possession of a motor vehicle, trailer, or other vehicle in exchange for consideration.
Storage, the keeping or retaining of a motor vehicle, trailer, or other vehicle for any purpose other than the sale of the vehicle in the regular course of business or the use of the vehicle exclusively outside of Massachusetts.
Trade-in, the transfer of complete ownership of a motor vehicle, trailer, or other vehicle from a purchaser to a seller, but only if the transfer occurs at the time of and as consideration for a sale of a similar type of vehicle by the seller to the purchaser.
Trailer, a vehicle which is not self-propelled, which must be towed by a motor vehicle, and which is constructed and designed for use upon the public highways.
Transferee, a purchaser or other person who becomes the legal, equitable, or beneficial owner of a motor vehicle, trailer, or other vehicle as a result of the sale, lease, gift or other transfer of title to or possession of a vehicle.
Transferor, a person who sells, gives, or otherwise transfers legal, equitable, or beneficial ownership or possession of a motor vehicle, trailer, or other vehicle to a transferee.
Unrealistic sales price, a sales price which is less than the average-trade-in price.
Use, the exercise of any right or power over a motor vehicle, trailer, or other vehicle incident to the ownership of title to or possession of the vehicle; but not including a sale of the vehicle in the regular course of business.
User, a person who stores, uses, consumes, or otherwise exercises a right or power over a motor vehicle, trailer, or other vehicle in Massachusetts.
Use tax, the tax imposed by M.G.L. c. 64I upon the storage, use, or other consumption of a motor vehicle, trailer, or other vehicle in Massachusetts.
Vehicle, a motor vehicle, trailer, or any self-propelled machine constructed and designed primarily for transportation or travel over a land surface; but not including railroad, railway, or trolley cars, or any other machines running upon rails or tracks.
(a) General rule. Upon the retail sale or other transfer of a motor vehicle, trailer, or other vehicle in Massachusetts, or upon the storage, use, or other consumption of a motor vehicle, trailer, or other vehicle in Massachusetts, a sales or use tax is imposed on the purchaser, transferee, or other user by either M.G.L. c. 64H or c. 64I. The sales tax, which is imposed by M.G.L. c. 64H, applies only to transfers of title or possession through retail sales by Massachusetts dealers and Massachusetts lessors in the regular course of business. The use tax, which is imposed by M.G.L. c. 64I, applies to all other types of transfers of title or possession where the vehicle transferred is thereafter stored, used, or otherwise consumed in Massachusetts. The tax is imposed at the rate of five percent (5%), and is calculated and paid pursuant to the provisions of the applicable statute and 830 CMR 64H.25.1. No exception, adjustment, exemption, deduction, or variance of the tax is permitted, unless specifically authorized by M.G.L. c. 64H or c. 64I and 830 CMR 64H.25.1.
(b) Sales tax.
1. The sale at retail of a motor vehicle, trailer, or other vehicle by a Massachusetts dealer or Massachusetts lessor in the regular course of business is subject to the sales tax imposed by M.G.L. c. 64H, § 2, unless specifically exempt under that statute and 830 CMR 64H.25.1(5), (7), or (8).
2. Every sale of a motor vehicle, trailer, or other vehicle in Massachusetts is presumed to be a sale at retail. This presumption is rebuttable, and may be overcome by sufficient evidence to the contrary.
(c) Use tax.
1. The storage, use, or other consumption in Massachusetts of a motor vehicle, trailer, or other vehicle purchased or transferred for storage, use, or other consumption in Massachusetts, is subject to the use tax imposed by M.G.L. c. 64I, § 2, unless specifically exempt under that statute and 830 CMR 64H.25.1(5), (7), or (8).
2. Every motor vehicle, trailer, or other vehicle sold or transferred for delivery in Massachusetts or brought into Massachusetts is presumed to have been sold or transferred for storage, use, or other consumption in Massachusetts, unless the vehicle is used exclusively outside of Massachusetts for a period of six (6) months before the date it is first delivered, brought into, or used in Massachusetts. This presumption is rebuttable, and may be overcome by sufficient evidence to the contrary. A vehicle which is used exclusively outside of Massachusetts for a period of at least six (6) months before it is delivered, brought into, or used in Massachusetts is subject to the use tax imposed by M.G.L. c. 64I, § 2 only if, at the time of the purchase or transfer, the purchaser or transferee intended to store, use, or otherwise consume the vehicle in Massachusetts.
(d) Examples. The following examples illustrate the application of 830 CMR 64H.25.1(3).
Example 1: Mr. Blue lives in Florida. While visiting in Massachusetts he decides to purchase a Volvo from a Massachusetts dealer for use in Florida. He pays for the vehicle and receives the certificate of origin to and possession of the vehicle in Massachusetts. Thereafter he drives the vehicle to his home in Florida. Mr. Blue must pay Massachusetts sales tax on the Volvo because title to and possession of the vehicle were transferred to him in Massachusetts.
Example 2: Ms. Green lives in New Hampshire. She comes to Massachusetts to purchase an automobile for use in New Hampshire, and orders an Oldsmobile from a Massachusetts dealer at an agreed upon price. When the vehicle becomes available, the dealer delivers it to Ms. Green in New Hampshire. Ms. Green then pays the dealer and receives the certificate of origin to and possession of the vehicle in New Hampshire. Thereafter she uses it in New Hampshire. The sale to Ms. Green is not subject to the Massachusetts sales or use tax because neither title to nor possession of the vehicle was transferred in Massachusetts and because it was not purchased for use in Massachusetts.
Example 3: Mr. Fox lives in Massachusetts. While vacationing in Europe he purchases a Volkswagen, which he then uses to travel through various European countries. Four (4) months later he returns to Massachusetts with the vehicle. Mr. Fox must pay a use tax to Massachusetts for the Volkswagen. It is presumed that he purchased the vehicle for storage, use, or other consumption in Massachusetts because it was not used exclusively outside of Massachusetts for a six (6) month period following the date of purchase.
(a) General rule. Every purchaser, transferee, or other user having title to or possession of a motor vehicle, trailer, or other vehicle in Massachusetts who is required by M.G.L. c. 90 to register the vehicle in Massachusetts, or who is required by M.G.L. c. 90D to title the vehicle in Massachusetts, must, within ten (10) days of the date of purchase, transfer, or use, file with the Registrar a completed Application for Title and Registration (Registry of Motor Vehicles Form RMV-1) and pay a sales or use tax. If a purchaser, transferee, or other user is not required by M.G.L. c. 90 to register the vehicle in Massachusetts, and is not required by M.G.L. c. 90D to title the vehicle in Massachusetts, the purchaser, transferee, or other user must, on or before the twentieth day of the month following the month of purchase, transfer, or use, file with the Commissioner a completed Sales Tax Payment form (Department of Revenue Form ST-7R) and pay the sales or use tax.
(b) Form of Payment. Payment of the sales or use tax must be as follows:
1. General rule. Payment of the sales or use tax to the Commissioner or Registrar may be in the form of cash or money order; bank, cashier's, or certified check; personal or business check of the party in whose name the vehicle is to be registered; or business check of a Massachusetts dealer, lessor, insurer or other business entity on its own behalf or on behalf of others.
2. Special rules for payment by personal or business checks. A separate personal or business check must be submitted for each Application for Title and Registration (Form RMV-1) and each personal or business check must contain the following identifying information:
a. the name and address of the party applying for the title or registration of the vehicle, as stated on the Application for Title and Registration (Form RMV-1); and
b. the name and address of the payor, if other than the applicant (i.e., payment by a Massachusetts dealer, lessor, insurer, or other business entity on behalf of the applicant).
The Registrar may not accept any personal or business check unless it conforms to the requirements of 830 CMR 64H.25.1(4)(b)2.
3. Personal or business checks not honored by bank. Where the sales or use tax is paid by personal or business check by an applicant (or by a business entity on the applicant's behalf) and the check is not honored by the bank on which the check is drawn, the following consequences shall occur:
a. the Registrar shall immediately withhold issuing the Certificate of Title of the vehicle for which the check was submitted; and
b. the Registrar shall prohibit the transfer of any Certificate of Registration for such vehicle, and if such Registration is issued, shall suspend or revoke such Registration; and
c. the Registrar shall not issue or renew any learner's permit, license to operate a motor vehicle, Certificate of Registration or Title, number plates, stickers, decals or any other items issued under the provisions of M.G.L. c. 90 or 90D, to any applicant who submits such check to the Registrar or on whose behalf such check is submitted; and
d. these restrictions shall remain in effect until said check (or a subsequent check) is honored or until payment in full is otherwise made and collected.
4. Electronic funds transfers. The Registrar may, with the approval of the Commissioner, enter into agreements with Massachusetts business entities (for example, motor vehicle dealers, lessors, and insurers) to facilitate payment to the Registrar via electronic funds transfer of the tax due on sales of motor vehicles. All such taxes are to be transmitted to the Registrar by electronic funds transfer on a daily basis.
(c) Issuance of Certificates of Title and Registration. The Registrar may not issue a Certificate of Title and Registration for any motor vehicle or trailer unless:
1. the purchaser, transferee, or user pays a sales or use tax on the vehicle in the full required amount; or
2. the purchaser, transferee or user establishes that the tax or full amount of the tax is not applicable solely by reason of an exemption in M.G.L. c. 64H or c. 64I, and in 830 CMR 64H.25.1(5), (7), or (8). The rules stated in 830 CMR 64H.25.1(4)(c), do not apply when the Registrar issues a duplicate or a renewal of the Certificate of Title and Registration.
(d) Application for Title and Registration. The Application for Title and Registration (Form RMV-1) must be completed as follows:
1. Dealer sales. In the case of a sale at retail by a Massachusetts dealer in the regular course of business, the dealer must complete the Application for Title and Registration (Form RMV-1) and provide five (5) copies thereof to the purchaser.
2. Casual sales. In the case of a casual and isolated sale or transfer, the purchaser, transferee, or user must complete the Application for Title and Registration (Form RMV-1) and four (4) copies thereof.
(e) Payment of tax upon use of exempt vehicles by dealers or lessors. In the case of a motor vehicle, trailer, or other vehicle purchased by a Massachusetts dealer or Massachusetts lessor for resale in the regular course of business, a use tax becomes due if the vehicle is used by the dealer or lessor in a manner other than for resale in the regular course of business. The tax is computed on the cost of the vehicle to the dealer or lessor, including all accessories installed by the dealer or lessor, and is paid pursuant to M.G.L. c. 64I, and the applicable provisions of 830 CMR 64H.25.1(4), (5), and (10).
(a) General rule. The sales and use tax is five percent (5%) of the sales price, subject to the following rules.
(b) Unrealistic sales prices on motor vehicles and trailers. If a motor vehicle or trailer is sold at an unrealistic sales price, the tax is computed as follows:
1. Dealer sales. If the sale is by a Massachusetts dealer in the regular course of business, the sales tax may be computed on the sales price. Upon payment of the tax, the Registrar may issue a Certificate of Title and Registration, but the exemption is subject to the Commissioner's review and verification. In such cases, the Registrar must forward to the Commissioner a copy of the Application for Title and Registration (Form RMV-1) pursuant to the provisions of 830 CMR 64H.25.1(6)(d).
2. Casual and isolated sales. If a motor vehicle, trailer or other vehicle is sold or transferred in a casual and isolated sales transaction, the sales price for purposes of computing use tax is determined as follows:
a. Sales price. The sales price of a motor vehicle, trailer or other vehicle transferred in a casual and isolated sale is the greater of either 1) the actual amount paid by the purchaser for the vehicle, or 2) the average trade-in value of the vehicle.
b. High and Low Mileage Vehicles. In the case of a motor vehicle or other vehicle with high or low mileage that is transferred in a casual and isolated sale, the average trade-in value of such a vehicle must be adjusted upwards or downwards in accordance with any High and Low Mileage Tables in the applicable used vehicle pricing guide. A high or low mileage vehicle is identified by the type of vehicle, the year of manufacture, and the amount of mileage at the time of transfer.
c. Salvage Titled Vehicles. In the case of a motor vehicle, trailer, or other vehicle titled by the Registrar as a "salvage vehicle," the sales price upon which the use tax shall be computed is the actual amount paid by the purchaser for the vehicle, valued in money or money's worth, without reference to the average trade-in value of such vehicle. For purposes of this subsection, a salvage vehicle is any vehicle that is determined by a motor vehicle insurer to be a total loss due to fire, vandalism, collision, theft, flood or similar event and that has a "SALVAGE TITLE" stamp on its Form RMV-1.
A salvage vehicle is identified as one of two types: parts only or repairable. A salvage vehicle determined to be for parts only can never be retitled or reregistered. A salvage vehicle determined to be repairable may be retitled and reregistered as a reconstructed or recovered theft vehicle.
The Registrar may not issue a Certificate of Title and Registration unless the tax is computed in accordance with the provisions in 830 CMR 64H.25.1(5). Upon payment of the tax and the submission of any documents required under this regulation, the Registrar may issue the Certificate of Title and Registration. The Registrar must forward to the Commissioner a copy of the Application for Title and Registration form (Form RMV-1) and any other documents submitted at the time of registration, pursuant to the provisions of 830 CMR 64H.25.1(6)(d).
3. Examples. The following examples illustrate the application of 830 CMR 64H.25.1(5)(b).
Example 1: S, an individual who is not a Massachusetts dealer, sells to V, also not a Massachusetts dealer, his Volvo for $6,000. The average trade-in value of the Volvo is $8,000. The sale is a casual and isolated sale by an individual, and so the average trade-in value of $8,000 is the sales price for purposes of calculating the use tax because it is greater than the actual amount paid of $6,000. Therefore, V must pay a use tax of $400 ($8,000 x 5%).
Example 2: K, an individual who is not a Massachusetts dealer, sells to F, also not a Massachusetts dealer, a Ford with high mileage for $6,000. The average trade-in value listed under NADA for the Ford is $5,000, but there is a $500 reduction that applies under the NADA High Mileage Tables. Thus, for use tax purposes, the average trade-in value is $4,500. The actual sales price of $6,000 is the sales price for purposes of calculating the use tax because it is greater than the adjusted average trade-in value of $4,500 ($5,000 minus $500 for high mileage). Therefore, F must pay a use tax of $300 ($6,000 x 5%).
(c) Trade-ins on motor vehicles and trailers. If a motor vehicle or trailer is traded-in or exchanged on the purchase or transfer of another motor vehicle or trailer, the tax is computed as follows:
1. Sales by Massachusetts dealers. If the sale is by a Massachusetts dealer in the regular course of business and the purchaser either previously paid a tax on the vehicle traded-in, or is exempt from tax on the vehicle traded-in under M.G.L. c. 64H or c. 64I, and 830 CMR 64H.25.1(5), (7) or (8), the sales tax is computed on the sales price, reduced by any amount credited towards the sales price by reason of a trade-in.
2. Casual and isolated sales and transfers. If the sale or transfer is a casual and isolated sale or transfer, the use tax is computed on the sales price, which may not be reduced by any amount credited towards the sales price by reason of a trade-in.
3. Special definition of "Motor vehicle" for purposes of trade-ins. For the purposes of 830 CMR 64H.25.1(5)(c), the term "motor vehicle" means a vehicle designed for use and used primarily for transportation or travel on public highways. Off-road vehicles such as crawler tractors, front end loaders, cranes, and similar or other off-road vehicles are not motor vehicles or trailers under 830 CMR 64H.25.1(5)(c). Accordingly, a reduction from the sales price for amounts credited towards the sales price by reason of trade-ins for such vehicles is never allowed in computing the amount of tax due on a sale or transfer of an off-road vehicle.
(d) Examples. The following examples illustrate the application of 830 CMR 64H.25.1(5)(c). For purposes of this subsection, the actual purchase price is presumed to be greater than the average trade-in value of vehicles described in examples 4 and 5.
Example 1: D, who is a Massachusetts dealer, sells a Chevrolet in the regular course of business to P for $6,000. Upon registration of the car, P must pay a sales tax of $300 ($6,000 x 5%).
Example 2: S, who is a Massachusetts dealer, sells a Chrysler in the regular course of business to B for $6,000. S credits B with $2,000 toward the sales price for a Ford which B trades in. B must pay a sales tax of $200 ($6,000 minus $2,000 for the trade-in, x 5%).
Example 3: N, a New Hampshire dealer who does not hold a Massachusetts Vendor's Registration Certificate, sells a Honda for use in Massachusetts to M, a Massachusetts resident, for $6,000. N credits M with $2,000 toward the sales price for a 1972 Plymouth which M trades in. M must pay a use tax of $300 ($6,000 x 5%). Since N is not a Massachusetts dealer selling the vehicle in the regular course of business, the sales price is not reduced by the $2,000 credited for the trade-in of M's 1972 Plymouth.
Example 4: Y, who is not a Massachusetts dealer, sells Z, who is not a Massachusetts dealer, his $6,000 Cadillac in exchange for Z's $2,000 Buick and $4,000 in cash. Since neither Y nor Z is purchasing a motor vehicle from a Massachusetts dealer in the regular course of business, each must pay a use tax. Y must pay a use tax of $100 on the Buick ($2,000 x 5%). Z must pay a use tax of $300 on the Cadillac ($6,000 x 5%).
Example 5: H, who is not a Massachusetts dealer, sells his $6,000 Mazda to J, who is not a Massachusetts dealer, for J's $2,000 Volkswagen and $4,000 worth of J's services working on H's house. H must pay a use tax for the Volkswagen of $100 ($2,000 x 5%). J must pay a use tax on the Mazda of $300 ($6,000 x 5%).
(a) General rule. No sale or transfer of a motor vehicle, trailer, or other vehicle is exempt from the full amount, or any part, of the sales or use tax for any reason other than the exemptions stated in M.G.L. c. 64H or c. 64I, or 830 CMR 64H.25.1(5), (7), or (8).
(b) Exemptions by Commissioner. The Commissioner may allow any exemption authorized by M.G.L. c. 64H, c. 64I, or 830 CMR 64H.25.1(5), (7), or (8). In considering a claim of exemption under any Division of 830 CMR 64H.25.1(5), (7), or (8), the Commissioner may accept evidence in the form and of the type described in the Division, or in any other form and of any other type the Commissioner determines is acceptable.
(c) Exemptions by Registrar. The Registrar may not allow any exemption unless the right to grant the exemption is expressly authorized to the Registrar in 830 CMR 64H.25.1(5), (7), or (8). In considering a claim of exemption under any Division of 830 CMR 64H.25.1(5), (7), or (8), the Registrar may not accept any evidence unless it is in the form and of the type described in the Division.
(d) Review of unrealistic sales prices and other exemptions. In every case in which the tax is computed on an unrealistic sales price, and in every case in which an exemption is allowed with respect to the payment of the full amount, or any part, of the sales or use tax, the Application for Title and Registration (Form RMV-1) or Sales Tax Payment form (Form ST-7R), whichever is applicable, is subject to review and verification by the Commissioner. The Registrar or other person accepting the Application for Title and Registration (Form RMV-1) or Sales Tax Payment form (Form ST-7R), or otherwise granting the exemption must, within thirty (30) days from the date the exemption is granted, or within such other period as the Commissioner may determine:
1. inform the Commissioner that the applicable forms and other documents are for the Commissioner's review and verification;
2. inform the Commissioner of the identity, position, title, and office of the person granting the exemption;
3. inform the Commissioner of the specific statutory and regulatory provisions authorizing the granting of the exemption;
4. attach all applicable forms and documents, and any other evidence submitted in connection with the granting of the exemption; and
5. forward to the Commissioner for review and verification a copy of the applicable forms, along with all the required attachments.
(a) General rule. The sale or transfer of a motor vehicle, trailer, or other vehicle is exempt from the sales and use tax under M.G.L. c. 64H and c. 64I and 830 CMR 64H.25.1(7), as follows.
(b) Sales and purchases for resale. Sales and purchases for resale by Massachusetts dealers and Massachusetts lessors are exempt from tax, subject to the following rules:
1. Requirements for exemption:
a. The sale of a motor vehicle, trailer, or other vehicle to a Massachusetts dealer who purchases the vehicle exclusively for resale in the regular course of business is exempt from the sales and use tax only if the vehicle is in fact used exclusively for resale. The sale of a motor vehicle, trailer, or other vehicle to a Massachusetts lessor who purchases the vehicle exclusively for lease or rental in the regular course of business is exempt from the sales and use tax under the preceding sentence only if the vehicle is in fact used exclusively for lease or rental. The sale of a motor vehicle, trailer, or other vehicle to a Massachusetts dealer or Massachusetts lessor who purchases the vehicle for demonstration or display is considered a purchase for resale in the regular course of business and is exempt from the sales and use tax under 830 CMR 64H.25.1(7)(b).
b. The sale of a motor vehicle, trailer, or other vehicle to a person who is an agent, employee, or other representative of a Massachusetts dealer or Massachusetts lessor is a sale to the dealer or lessor if the Certificate of Origin, Title, or other document of ownership is issued, transferred, or assigned in the name of the dealer or lessor. The sale of a motor vehicle, trailer, or other vehicle to a person claiming to be an agent, employee, or other representative of the dealer or lessor is presumed not to be a sale to the dealer or lessor if the Certificate of Origin, Title, or other document of ownership is not issued, transferred, or assigned in the name of the dealer or lessor. The presumption in the preceding sentence of 830 CMR 64H.25.1(7)(b)1.b., is rebuttable, and may be overcome only by sufficient evidence to the contrary submitted to the Commissioner in connection with an application for abatement or other administrative appeal authorized under the laws of Massachusetts.
c. If the sale of a motor vehicle, trailer, or other vehicle is exempt from tax under 830 CMR 64H.25.1(7)(b), at the time of purchase, and if the vehicle is subsequently used by a dealer or lessor in a manner other than for resale in the regular course of business, such subsequent use will subject the dealer or lessor to a use tax. The dealer or lessor must pay the tax pursuant to the applicable provisions of 830 CMR 64H.25.1(4), (5), and (10).
2. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(7)(b), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
3. To establish a claim of exemption under 830 CMR 64H.25.1(7)(b), a dealer or lessor must hold a Massachusetts Vendor's Registration Certificate and, if required by M.G.L. c. 140, must hold a license issued by the city, town, or municipality in which it is located. If a dealer applies for title only to a vehicle, the dealer must submit to the Commissioner a completed Application for Title and Registration (Form RMV-1), a completed Massachusetts Resale Certificate (Department of Revenue Form ST-4), and a copy of a current Dealer's License issued pursuant to M.G.L. c. 140 by the city, town, or other municipality in which it is located. If a lessor applies for title only to a vehicle, the lessor must submit to the Commissioner a completed Application for Title and Registration (Form RMV-1), a completed Massachusetts Resale Certificate (Form ST-4), and a completed Application for Deferred Payment form (Department of Revenue Form ST-7L). If a lessor applies for registration of a vehicle, the lessor must submit to the Commissioner a completed Application for Title and Registration (Form RMV-1) and a completed Application for Deferred Payment form (Form ST-7L).
4. Every Massachusetts dealer and Massachusetts lessor must apply to the Commissioner every three (3) years for renewal of its Massachusetts Vendor's Registration Certificate by submitting to the Commissioner on or before January 30 of the applicable calendar year an Application for Re-certification form (Department of Revenue Form MVU-5A). If a dealer or lessor is required by M.G.L. c. 140 to be licensed by the city, town, or municipality in which it is located, the dealer or lessor must also submit a copy of its current license. A Massachusetts dealer or Massachusetts lessor who fails to obtain renewal of its Massachusetts Vendor's Registration Certificate as required herein shall not be entitled to an exemption under 830 CMR 64H.25.1(7)(b).
5. The Commissioner shall maintain a current listing of all Massachusetts dealers and Massachusetts lessors registered in Massachusetts to purchase motor vehicles for resale in the regular course of business who are required to comply and have complied with the requirements of 830 CMR 64H.25.1(7)(b). The Commissioner will not grant an exemption nor approve an exemption on an Application for Title and Registration (Form RMV-1) under 830 CMR 64H.25.1(7)(b), unless the name of the dealer or lessor seeking the exemption appears on the listing.
(c) Sales to exempt organizations. The sale or transfer of a motor vehicle, trailer, or other vehicle to an organization qualifying for treatment under I.R.C. § 501(c)(3) is exempt from the sales and use tax only if the vehicle is purchased by or transferred to the organization, registered in its name, and used directly and exclusively in pursuit of the purposes of the organization.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for any vehicle as to which a claim of exemption under 830 CMR 64H.25.1(7)(c), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(7)(c), the purchaser or transferee must hold a Certificate of Exemption (Department of Revenue Form ST-2) issued by the Commissioner. The Commissioner may issue the certificate to an organization qualifying for this exemption upon receipt of a completed Application for Registration form (Form TA-1).
(d) Sales to government agencies. The sale or transfer of a motor vehicle, trailer, or other vehicle to the United States or Massachusetts, or to their respective subdivisions or agencies, is exempt from the sales and use tax. This exemption may be allowed by the Registrar, but only if the vehicle is registered in the name of the agency claiming the exemption.
(e) Intra-family casual and isolated sales or transfers. The casual and isolated sale or transfer of a motor vehicle, trailer, or other vehicle is exempt from the sales and use tax as follows:
1. Requirements for exemption:
a. Motor vehicles and trailers. The casual and isolated sale or transfer of a motor vehicle or trailer is exempt from the sales and use tax only if the purchaser or transferee is the parent, spouse, child, brother, or sister of the seller or transferor. For the purposes of 830 CMR 64H.25.1(7)(e), a vehicle owned jointly by a husband and wife may be treated as owned by either.
b. Other vehicles. The casual and isolated sale or transfer of a vehicle other than a motor vehicle or trailer is exempt from the sales and use tax.
2. This exemption may be allowed by the Registrar, but only if the seller or transferor previously registered the vehicle in Massachusetts, and if the Registrar receives an affidavit signed by the seller or transferor and the purchaser or transferee identifying the specific relationship between the parties to the sale or transfer, and stating that they are so related. If the surnames of the parties to the sale or transfer are the same, or if the parties reside at the same address, only the purchaser or transferee is required to sign the affidavit. The affidavit must be on a form prescribed by the Commissioner.
(f) Sales to the disabled. The sale or transfer of a motor vehicle to and for the use of any person who has suffered the loss or permanent loss of use of both legs, or both arms, or one leg and one arm is exempt from the sales and use tax. For the purposes of 830 CMR 64H.25.1(7)(f), a vehicle owned jointly by a husband and wife may be treated as owned by either.
1. This exemption applies only to a single motor vehicle which must be purchased by and registered for the personal, non-commercial use of the purchaser or transferee qualifying for this exemption.
2. Loss of use under 830 CMR 64H.25.1(7)(f), means a loss of function of at least eighty percent (80%).
3. This exemption may be allowed by the Registrar, but only if the Registrar receives an affidavit from the person qualifying for this exemption and the person's physician stating that the person suffers a loss of use described in 830 CMR 64H.25.1(7)(f). If the claim of exemption is based upon the loss of two (2) arms or two (2) legs, or one (1) arm and one (1) leg, the affidavit may be signed by either the person qualifying for the exemption or the person's physician. The affidavit must be on a form prescribed by the Commissioner.
(g) Out-of-state transfers. The sale or transfer of a motor vehicle, trailer, or other vehicle in any state or territory within the United States that is subsequently brought to or used in Massachusetts is exempt from Massachusetts use tax as follows:
1. Requirements for exemption:
a. the purchaser or the transferee must have paid a sales or use tax on the vehicle to the state or territory in which the sale or transfer occurred;
b. the sales or use tax must have been paid by the purchaser or the transferee and legally due the state or territory;
c. the purchaser or the transferee must not have received and must not have a right to receive a refund or credit of the sales or use tax from the state or territory in which the sale or transfer occurred; and,
d. the state or territory to which the sales or use tax was paid must allow a corresponding exemption with respect to motor vehicle sales and use taxes paid to Massachusetts.
2. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for any vehicle as to which a claim of exemption under 830 CMR 64H.25.1(7)(g) has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
3. To establish a claim of exemption under 830 CMR 64H.25.1(7)(g), the purchaser or transferee must submit to the Commissioner a receipt from the state or territory in which the sale or transfer occurred, showing the amount of sales or use tax paid, the date and place of payment, and the name of the payor. If the purchaser or transferee does not submit a receipt, the Commissioner may accept a Certificate of Title and Registration issued to the purchaser or transferee from the state or territory in which the sale or transfer occurred as proof that the tax was previously paid by the purchaser or transferee. The purchaser or transferee must also submit to the Commissioner an affidavit stating that the purchaser or transferee did not receive and is not entitled to receive credit or refund of the tax. The affidavit must be on a form prescribed by the Commissioner.
4. If this exemption applies and if the rate of tax imposed by the state or territory in which the vehicle was sold or transferred is less than the rate imposed by Massachusetts, the purchaser or transferee must pay a use tax computed by multiplying the sales price of the vehicle by the difference between the Massachusetts rate and the rate imposed by the state or territory in which the vehicle was sold or transferred. The tax must be paid pursuant to 830 CMR 64H.25.1(4) and (5).
5. Examples. The following examples illustrate the application of 830 CMR 64H.25.1(7)(g).
Example 1: Mr. Jones is a resident of State X, which has no sales or use taxes. Mr. Jones purchases a motor vehicle in State X, where he registers it and uses it for three months. He then moves to Massachusetts and registers the vehicle in Massachusetts. Mr. Jones must pay a use tax in Massachusetts because he did not pay a sales or use tax on the vehicle in State X.
Example 2. Mr. Right lives in Massachusetts. While vacationing in State Z, Mr. Right purchases a motor vehicle for $10,000 and thereafter brings it to Massachusetts. Under the sales and use tax laws of State Z, Mr. Right is required to pay and does pay a sales tax to State Z computed at the rate of 4% of the sales price (or $400). State Z honors the sales and use tax laws of Massachusetts and does not impose its sales and use tax on vehicles which are purchased and taxed in Massachusetts. Mr. Right must pay a use tax to Massachusetts, but the tax is computed on the sales price multiplied by the difference between the Massachusetts rate (5%) and the rate of tax in State Z (4%). The use tax is therefore $10,000 x 1% or $100.
For additional examples, see 830 CMR 64H.25.1(3)(d).
(h) Vehicles used in interstate commerce. The sale or transfer of a motor vehicle, trailer, or other vehicle in any state or territory within the United States that is subsequently brought to or used in Massachusetts for purposes of interstate commerce, is exempt from Massachusetts use tax if the sale or transfer of the vehicle is exempt under the provisions of 830 CMR 64H.25.1(7)(g), above, or if the use of the vehicle in Massachusetts as part of interstate commerce is exempt from use tax under the Constitution or laws of the United States. For the purposes of this subsection, the use of such a vehicle in Massachusetts as part of interstate commerce is exempt from Massachusetts use tax under the Constitution or laws of the United States only if application of the use tax violates the test applied by the United States Supreme Court in Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), or any other test subsequently developed by the courts or enacted under the laws of the United States. Under the Complete Auto Transit test, the imposition of a use tax is permissible if
1. the tax is applied to an activity that has a substantial nexus with Massachusetts;
2. the tax is fairly apportioned;
3. the tax does not discriminate against interstate commerce; and,
4. the tax is fairly related to the services provided by the taxing authority.
Complete Auto Transit, Inc. v. Brady, 430 U.S. at 279.
(i) Sales of fire engines or ambulances. The sale or transfer of a fire engine or ambulance to and the use thereof by a volunteer non-profit organization providing public fire protection is exempt from the sales and use tax.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(7)(i), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(7)(i), the purchaser or transferee must submit to the Commissioner an affidavit from an authorized representative of the organization stating that:
a. the organization is registered as a volunteer non-profit organization providing public fire protection; and
b. the vehicle was purchased or transferred exclusively for use as a fire engine or ambulance by the organization. The affidavit must be on a form prescribed by the Commissioner.
(j) Sales to common carriers. The sale of a motor bus to a common carrier to provide scheduled intracity local service is exempt from the sales and use tax.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(7)(j), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(7)(j), the carrier must hold a Certificate of Exemption form (Department of Revenue Form MVU-20) issued by the Commissioner. The Commissioner may issue the certificate to a carrier qualifying for this exemption upon receipt of a certificate from the Department of Public Utilities (or from a city, town, or municipality pursuant to its authority under M.G.L. c. 161 A, § 11A) stating that the motor bus will be used for scheduled intracity local service.
(k) Sales to foreign diplomats. The sale or transfer of a motor vehicle, trailer, or other vehicle to an ambassador, minister, foreign mission or other diplomatic representative of a foreign government is exempt from the sales and use tax.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(7)(k), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(7)(k), the purchaser or transferee must submit to the Commissioner a copy of a Tax Exemption Card or Mission Tax Exemption Card from the United States Department of State issued to or in the name of the purchaser or transferee.3.
(a) General rule. The transfer of a motor vehicle, trailer, or other vehicle without consideration is exempt from the sales and use tax. Transfers which qualify as transfers without consideration are listed in 830 CMR 64H.25.1(8), and are exempt from tax subject to the following rules.
(b) Transfers by gift. The transfer of complete ownership of a motor vehicle, trailer, or other vehicle by a donor to a donee, without consideration and with an intent on the part of the donor that the transfer is a gift, is exempt from the sales and use tax.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(8)(b), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(8)(b), both donor and donee must submit to the Commissioner an affidavit on a form prescribed by the Commissioner stating that:
a. neither party made or received payment in any form in connection with the transfer;
b. neither party made a promise of payment for the vehicle, and neither party expects payment in the future;
c. neither party assumed any debt in connection with the transfer; and
d. at the time of the transfer, the donor intended to make a gift of the vehicle to the donee.
(c) Transfers for contests, drawings, and raffles. The transfer of a motor vehicle, trailer, or other vehicle to the winner of a contest, drawing, or raffle is deemed to be a gift from the sponsor to the winner, and the winner is exempt from the sales and use tax. However, the donation of a vehicle by a dealer or lessor for a contest, drawing, or raffle is a use of the vehicle by the dealer or lessor other than for resale in the regular course of business, and, accordingly, is subject to the use tax. The use tax must be paid by the dealer or lessor pursuant to 830 CMR 64H.25.1(4) and (5). The tax is computed on the cost of the vehicle to the dealer or lessor, including the cost of all accessories installed by the dealer or lessor.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under this Division, 830 CMR 64H.25.1(8)(c), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(8)(c), the winner must submit to the Commissioner an affidavit on a form prescribed by the Commissioner and signed by both the winner and an authorized representative of the sponsor which:
a. states the name and address of the person, if any, donating the vehicle to the sponsor;
b. states the name and address of the sponsor; and
c. states that the person seeking the exemption is the contest winner.
(d) Transfers by inheritance. The transfer of a motor vehicle, trailer, or other vehicle at death, by intestacy, will, or otherwise, to an heir, legatee, or other beneficiary is exempt from the sales and use tax.
1. This exemption may be allowed by the Registrar, but only upon receipt of the following:
a. a copy of a Notice of Appointment from a Probate Court identifying the executor, administrator, or other personal representative of the decedent's estate, if applicable; and
b. an affidavit, signed by both the executor, administrator, or other personal representative of the decedent's estate and the transferee, stating that the transferee is entitled to the title to or possession of the vehicle under the laws of intestacy, under the will, or otherwise. The affidavit must be on the letterhead of the executor, administrator, or other personal representative, or on a form prescribed by the Commissioner.
2. If the transferee is the surviving spouse of the decedent, the Registrar may accept, in lieu of any other documents, a copy of the decedent's death certificate and an affidavit signed by the surviving spouse, stating that he or she is entitled to the vehicle under the laws of intestacy, under the will, or otherwise.
(e) Transfers by repossession. The transfer by repossession of a financed or secured motor vehicle, trailer, or other vehicle to the lienholder or security holder is exempt from the sales and use tax, but only if a sales or use tax on the vehicle was previously paid by the debtor. if the lienholder or security holder thereafter registers the vehicle with the Registrar, this exemption does not apply.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(8)(e), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(8)(e), the lienholder or security holder must submit to the Commissioner the following:
a. the Certificate of Title stating the name of the lienholder or security holder;
b. an affidavit on a form prescribed by the Commissioner signed by an authorized representative of the lienholder or security holder stating that the vehicle was repossessed under authority of a lien or security interest; and
c. proof that a sales or use tax on the vehicle was previously paid by the debtor. A Certificate of Title and Registration in the name of the debtor is sufficient to satisfy this requirement.
(f) Transfers to insurers. The transfer of a motor vehicle, trailer, or other vehicle to an insurer is exempt from the sales and use tax, but only if the transfer is made by an insured in connection with a claim for the loss or loss of use of the vehicle under an insurance policy, and if a sales or use tax on the vehicle was previously paid by the insured. If the insurer thereafter registers the vehicle with the Registrar, this exemption does not apply.
1. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(8)(f), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
2. To establish a claim of exemption under 830 CMR 64H.25.1(8)(f), the insurer must submit to the Commissioner an affidavit signed by an authorized representative of the insurer stating that the vehicle was transferred by an insured in connection with a claim under an insurance contract for the loss or loss of use of the vehicle. The affidavit must be on a form prescribed by the Commissioner. A Certificate of Title and Registration in the name of the insured is sufficient to satisfy the requirement that the insured previously paid a tax on the vehicle.
(g) Sales and transfers to or from business entities. The sale or transfer of a motor vehicle, trailer, or other vehicle to or from a business entity is generally subject to the sales or use tax. However, the sale or transfer of a motor vehicle, trailer, or other vehicle to or from a business entity is exempt from tax as follows:
1. Requirements for exemption. In all cases the transferor must have previously paid a sales or use tax on the vehicle; and
a. the sale or transfer must be pursuant to a transaction which qualifies as a "reorganization" within the meaning of I.R.C. § 368(a)(1); or
b. the sale or transfer must be pursuant to the formation of a partnership or corporate trust, or pursuant to the organization of a corporation, solely in exchange for an ownership interest in the enterprise; or
c. the sale or transfer must be to an owner of a business entity solely in exchange for the owner's interest on the complete dissolution of a partnership or corporate trust, or the complete liquidation of a corporation.
2. The sale or transfer of a vehicle by a business entity in exchange for cash or other consideration which is thereafter distributed to an owner on the dissolution of a partnership or corporate trust, or on the liquidation of a corporation, is not exempt from tax under 830 CMR 64H.25.1(8)(g).
3. This exemption may be allowed only by the Commissioner. The Registrar may not issue a Certificate of Title and Registration for a vehicle as to which a claim of exemption under 830 CMR 64H.25.1(8)(g), has been made unless the Commissioner has first approved the exemption on the Application for Title and Registration (Form RMV-1).
4. To establish a claim of exemption under 830 CMR 64H.25.1(8)(g), the Commissioner must receive an affidavit on a form prescribed by the Commissioner and signed by an authorized representative of the transferor and by an authorized representative of the transferee stating that the sale or transfer is exempt from tax, and stating the specific provisions within 830 CMR 64H.25.1(8)(g), under which the exemption is claimed. If a Final Determination Letter from the Internal Revenue Service has been issued with respect to the transaction, the letter must accompany the affidavit. A Certificate of Title and Registration in the name of the transferor is sufficient to satisfy the requirement that the transferor previously paid a tax on the vehicle.
5. If the sale or transfer occurs within ninety (90) days from the date of the transaction under which the exemption is claimed, it is presumed that the sale or transfer qualifies for this exemption. If the sale or transfer occurs after the ninetieth day following the date of the transaction under which the exemption is claimed, it is presumed that the transfer does not qualify for this exemption. Both of the presumptions under 830 CMR 64H.25.1(8)(g)5. are rebuttable, and may be overcome by sufficient evidence to the contrary.
6. If the Commissioner reasonably believes that the transaction under which the exemption is claimed was undertaken not for a bona fide business purpose but to avoid imposition of any tax, the exemption will not be approved.
(a) General rule. The lease or rental of a motor vehicle, trailer, or other vehicle by a lessor in the regular course of business is a sale at retail and is subject to the sales tax. Each period for which a lease or rental payment is charged is considered a completed retail sale for the purpose of the imposition, collection, and payment of the tax. The sales price on which the tax is computed for each period is the total lease or rental charges for that period, subject to the following rules:
1. If a motor vehicle, trailer, or other vehicle is leased or rented for a period of one (1) year or more, and if the amount charged includes charges for fuel, insurance, motor vehicle excise, or registration fee, and if the charges for those items are separately stated in the lease, rental agreement, or billing, the charges for those items are not included in the sales price on which the tax is computed.
2. If a motor vehicle is leased or rented for one (1) year or more, and if the amount charged includes charges for insurance, motor vehicle excise, and registration fee which are not separately stated, the sales price on which the tax is computed for each period is reduced by twenty percent (20%). The preceding sentence does not apply to finance leasing arrangements.
3. If a motor vehicle is leased or rented for one (1) year or more, and if the amount charged includes charges for fuel, insurance, motor vehicle excise, and registration fee which are not separately stated, the sales price on which the tax is computed for each period is reduced by thirty percent (30%). The preceding sentence does not apply to finance leasing arrangements.
4. All other lease or rental arrangements are governed by the general rule in 830 CMR 64H.25.1(9)(a).
(b) If a vehicle which has been leased or rented is sold or transferred by a lessor, the sale or transfer is subject to the use tax under M.G.L. c. 64I, § 2 and 830 CMR 64H.25.1.
(c) Examples. The following examples illustrate the application of 830 CMR 64H.25.1(9):
Example 1: R & R Motors, a leasing company, purchases a Cadillac for leasing in the regular course of business. R & R Motors leases the Cadillac to P under a two (2) year contract under which P is obligated to pay $500 per month. Included in the monthly charge are the following: insurance (personal liability, property, fire, theft, and collision), $70; motor vehicle excise tax, $34; and registration, $1. R & R Motors separately states its charges for insurance, excise tax and registration. In this example, it will collect $19.75 in sales tax per month ($500 minus $105 x 5%) from P, in addition to the $500 leasing charge.
Example 2: The facts are the same as in example 1, above, except that R & R Motors does not separately state the charges for insurance, excise tax and registration. In this example, it will collect $20 in sales tax per month ($500 x 80% x 5%) from P, in addition to the $500 leasing charge.
(a) General rule. The sale of a motor vehicle, trailer, or other vehicle to a Massachusetts dealer or Massachusetts lessor who purchases the vehicle for resale in the regular course of business is exempt from the sales and use tax. During the period in which the vehicle is held for resale, the dealer or lessor may use it for demonstration or display, without incurring liability for sales or use tax. However, if the dealer or lessor uses the vehicle for any purpose other than resale in the regular course of business, a use tax must be paid to the Commissioner. The tax is computed on the cost of the vehicle to the dealer or lessor which includes the cost of any and all accessories installed by the dealer or lessor, subject to the following rules:
(b) Rules for dealers.
1. If the vehicle is registered with the Registrar, the use tax is computed and paid in a single payment pursuant to the applicable rules 830 CMR 64H.25.1(4) and (5).
2. If the vehicle is not registered with the Registrar, the dealer may elect one of two (2) methods of payment, as follows:
a. the dealer may pay the use tax in a single payment pursuant to the applicable rules of 830 CMR 64H.25.1(4) and (5); or
b. the dealer may pay a monthly use tax of five percent (5%) for each vehicle used computed on three percent (3%) of the cost of the vehicle. if the dealer elects this method of payment, the dealer must file each month with the Commissioner a Sales and Use Tax Return (Department of Revenue Form ST-9M), along with payment of the monthly tax.
(c) Rules for lessors. If a lessor is required to pay a use tax under the general rule of 830 CMR 64H.25.1(10)(a), the lessor must pay the tax in a single payment pursuant to the applicable rules of 830 CMR 64H.25.1(4) and (5).
(d) Use of "Dealer" or "Repair" license plates. A motor vehicle, trailer, or other vehicle bearing a "Dealer" license plate issued by the Registrar pursuant to M.G.L. c. 90, may be used only for demonstration or display. A motor vehicle, trailer, or other vehicle bearing "Repair" license plates issued by the Registrar pursuant to M.G.L. c. 90, may be used only if the vehicle is being repaired, altered, equipped, or being transferred for repairs, alteration, or equipment. The use by a dealer or lessor of a vehicle bearing "Dealer" or "Repair" license plates in any manner other than the purposes stated in 830 CMR 64H.25.1(10)(d), is a use other than for resale in the regular course of business, and is subject to the use tax pursuant to the rules of 830 CMR 64H.25.1(10).
(e) Trade-ins by dealers and lessors. If a dealer or lessor is required to pay a use tax on the cost of a vehicle pursuant to the rules of 830 CMR 64H.25.1(10), the cost of the vehicle to the dealer or lessor may not be reduced by any amount credited toward the cost by reason of a trade-in.
(f) Examples. The following examples illustrate the provisions of 830 CMR 64H.25.1(10):
Example 1: The cost to Able Motors, Inc. for every vehicle which it purchases for resale is $6,000, which amount includes the accessories it installs in each vehicle. Each year the president of Able Motors, Inc. takes one of the vehicles which was purchased for resale and uses it for personal purposes. The vehicle is registered in the name of Able Motors, Inc. Able Motors, Inc. must pay a use tax each year for the vehicle which it registers for the president's personal use. The tax is computed and paid pursuant to 830 CMR 64H.25.1(4) and (5).
Example 2: The facts are the same as in the previous example, but in addition to the president, the salespeople who are employed by Able Motors, Inc. are permitted to use ten (10) demonstration vehicles for various company errands unrelated to customer demonstration. Each of these vehicles bears a "Dealer" plate. Able Motors, Inc. must pay a use tax on each of these vehicles. It may compute the use tax at the rate of 5% of its cost for each vehicle (5% x $6,000) and pay a use tax of $300 for each of the ten (10) vehicles, or it may elect to pay a monthly tax for each vehicle so used computed at the rate of 5% multiplied by 3% of its cost of the vehicle. If it elects this method of payment it must file a Sales Tax Return (Form ST-9M) and pay a use tax each month of $90 (5% x 3% x $6,000 x 10).
(a) General rule. For the purpose of computing and paying the tax under M.G.L. c. 64H, §§ 3(c) and 26, and M.G.L. c. 64I, §§ 4 and 27, and 830 CMR 64H.25.1(4) and (5), the term "motor vehicle" means a vehicle designed for use and used primarily for transportation or travel on public highways. Off-road vehicles such as crawler tractors, front end loaders, cranes, and similar or other off-road vehicles are not motor vehicles or trailers under 830 CMR 64H.25.1(11)(a).
(b) Sales by dealers and lessors. Upon the retail sale of an off-road or other vehicle which is not a motor vehicle or trailer as defined in 830 CMR 64H.25.1(11)(a), by a Massachusetts dealer or Massachusetts lessor in the regular course of business, the tax is paid to the dealer or lessor. No reduction from the sales price for an amount credited toward the sales price as a trade-in is allowed.
(c) Casual and isolated sales or transfers. The casual and isolated sale or transfer of an off-road or other vehicle which is a motor vehicle or trailer under 830 CMR 64H.25.1(2), is subject to the use tax. The casual and isolated sale or transfer of an off-road or other vehicle which is not a motor vehicle or trailer as defined in 830 CMR 64H.25.1(2), is exempt from the sales and use tax.
(a) General rule. The Commissioner shall refund the sales or use tax paid on a motor vehicle, trailer, or other vehicle if the sale of the vehicle is rescinded, or if the sale of the vehicle is void at law, subject to the following rules.
(b) Rescinded Sales. The purchaser must return the motor vehicle to the seller within 180 days from the date of sale and must receive the full consideration paid for the motor vehicle in cash or credit, less the seller's established handling fees, if any, before claiming a refund; or
(c) Sales void at law. The sale must be void at law because the seller did not have lawful title to or ownership of the vehicle at the time of the sale; and
(d) The purchaser must timely file with the Commissioner an Application for Abatement (Department of Revenue Form CA-6) pursuant to M.G.L. c. 62C, § 37, and the regulations thereunder (830 CMR 62C.37.1: Abatements.)
(a) General rule. Every person who sells, transfers, purchases, stores, uses, or otherwise consumes a motor vehicle, trailer, or other vehicle subject to the provisions of M.G.L. c. 64H or c. 64I and 830 CMR 64H.25.1, must retain copies of all returns, forms, records, and other documents pursuant to State Tax Administration Regulation 830 CMR 62C.25.1: (Record Retention).
(b) The provisions of 830 CMR 64H.25.1(13), are in addition to any other record-keeping requirements imposed by M.G.L. c. 62C or any other law, or established by the Commissioner.
(a) General rule. The provisions of M.G.L. c. 62C relating to interest and penalties are applicable to any failure to pay the tax imposed by M.G.L. c. 64H or c. 64I and 830 CMR 64H.25.1.
(b) Suspension and revocation of Vendor's Registration Certificates. Any Massachusetts dealer or Massachusetts lessor who fails to pay any tax required from such dealer or lessor under the provision of M.G.L. c. 64H or c. 64I and 830 CMR 64H.25.1, may be subject to suspension and revocation of its Massachusetts Vendor's Registration Certificate (Form ST-1).
(c) Criminal penalties. The criminal penalties for evasion of tax provided in M.G.L. c. 62C are applicable to the tax imposed by M.G.L. c. 64H and c. 64I and 830 CMR 64H.25.1.
(d) Other penalties. The provisions of 830 CMR 64H.25.1(14), are in addition to any other penalties imposed by law or established by the Commissioner.
(a) General rule. Pursuant to the Commissioner's statutory authority, the Commissioner may establish, and from time to time revise, written guidelines, procedures, and other documents described in State Tax Administration Regulation 830 CMR 62C.3.1: Department of Revenue Public Written Statements, as may be necessary for the proper and efficient administration and enforcement of M.G.L. c. 64H and c. 64I and 830 CMR 64H.25.1. Such guidelines, procedures, and other documents shall be supplemental to and not inconsistent with the provision of those statutes and 830 CMR 64H.25.1.
(b) Distribution to dealers and lessors. The Commissioner may distribute to Massachusetts dealers and Massachusetts lessors written guidelines, procedures, and other documents which describe and explain M.G.L. c. 64H and c. 64I and 830 CMR 64H.25.1. The Commissioner may require Massachusetts dealers and Massachusetts lessors to provide such written guidelines, procedures, and other documents to purchasers of motor vehicle trailers at the time of sale.
(a) General rule. A limousine business will be required to pay sales tax on its purchases of limousines. The furnishing of limousines driven by employees of the limousine business is a transportation service exempt from sales tax. This rule applies to transactions on or after June 30, 1988, the operational date of this section, 830 CMR 64H.25.1(16).
(b) Definitions. For the purposes of this section, 830 CMR 64H.25.1(16), the following terms have the following meaning:
Customer, a person or entity who engages a limousine business to provide transportation.
Employee, any person who is at least temporarily under the direct control and supervision of another person.
Limousine business, a business that generally provides transportation in motor vehicles driven by chauffeurs who are employees of the business.
(c) Purchases of motor vehicles by limousine businesses.
1. Purchases of motor vehicles for resale and lease.
a. The purchase of a limousine or other motor vehicle is exempt under 830 CMR 64H.25.1(7)(b), the exemption for sales and purchases for resale, only if the limousine is used exclusively for resale, lease, or rental. See 830 CMR 64H.25.1(7)(b)1.
b. Limousine businesses generally do not resell, lease, or rent their limousines to their customers.
2. Limousine businesses to pay sales tax upon registration. Limousine businesses will pay sales tax on their purchases of limousines upon registration, calculated at five percent of the purchase price of the limousines.
(d) Limousine businesses and the furnishing of transportation services.
1. Under M.G.L. c. 64H, § 1(13)(b), transportation services are not subject to Massachusetts sales and use tax.
2. If the customer of a limousine business hires a limousine to be driven by an employee of the limousine business, the transaction is a nontaxable transportation service.
3. If the customer of a limousine business hires a limousine to be driven by the customer, the transaction is a taxable rental of tangible personal property.
4. The occasional or incidental taxable rental of a limousine by a limousine business to a customer does not alter the requirement that the limousine business pay sales tax on its purchases of limousines upon registration.
(e) Limousine businesses to be removed from current listing of Massachusetts lessors. The Commissioner will require all limousine businesses to identify themselves as limousine businesses under procedures to be announced by the Department, in accord with 830 CMR 64H.25.1(15). The Commissioner will remove limousine businesses from the current list of Massachusetts lessors described in 830 CMR 64H.25.1(7)(b)(5).
REGULATORY AUTHORITY
830 CMR 64H.25.1: M.G.L. c. 14, § 6(1); M.G.L. c. 62C, § 3.
REGULATORY HISTORY
Date of promulgation: October 31, 1986
Amended: June 10, 1988 - section (16)
Amended: August 19, 1988 - section (12)(b)
Amended: December 27, 1996 - sections (2), (4)(b), (5)(b), (5)(d), (7)(g), (7)(h) and (16)(e)
