Current through Register 1531, September 27, 2024
(1)
Statement of Purpose; Effective Date; Outline of
Topics.
(a)
Statement of Purpose. The purpose of 830 CMR 62C.16.2
is to explain the procedures prescribed by the Commissioner, pursuant to M.G.L.
c. 62C, §§ 16(h) and (i), for payment of sales and use tax
liabilities imposed by M.G.L. c. 64H and M.G.L. c. 64I.
(b)
Effective Date.
830 CMR 62C.16.2 will be effective January 1, 1998.
(2)
Definitions. For
the purpose of 830 CMR 62C.16.2, the following terms shall have the following
meanings:
Commissioner, the Commissioner of
Revenue or the Commissioner's duly authorized representative.
Person, an individual, partnership,
trust or association, with or without transferable shares, joint-stock company,
corporation, society, club, organization, institution, estate, receiver,
trustee, assignee, or referee, and any other person acting in a fiduciary or
representative capacity, whether appointed by a court or otherwise, and any
combination of individuals acting as a unit.
Purchaser, a person who purchases or
uses tangible personal property or taxable services sold at retail, including a
buyer, vendee, lessee, licensee, or grantee.
Retail Sale, a sale as defined in
M.G.L. c. 64H, § 1 and M.G.L. c. 64I, § 1. In general, a retail sale
is a sale for any purpose other than resale in the regular course of
business.
Tangible personal property, personal
property of any nature consisting of any produce, goods, wares, merchandise and
commodities brought into, produced, manufactured or being within the
commonwealth, but does not include rights and credits, insurance policies,
bills of exchange, stocks, bonds, and similar evidence of indebtedness or
ownership. For purposes of M.G.L. c. 64H and c. 64I, tangible personal property
includes gas, electricity and steam.
Tax, the excise imposed under M.G.L.
c. 64H or c. 64I.
Taxable period, any period for which a
sales and use or use tax return is due under 830 CMR 62C.16.2.
Taxable services, any service subject
to tax under M.G.L. c. 64H or M.G.L. c. 64I.
Use, the exercise of any right or
power over tangible personal property incident to the ownership of that
property, except that it does not include the sale of that property in the
regular course of business; and enjoyment of the benefit of a service, except
that it does not include the sale of services in the regular course of
business.
Vendor, a retailer or other person
selling tangible personal property or taxable services, the gross receipts from
the retail sale of which are required to be included in the measure of the tax
imposed by M.G.L. c. 64H or c. 64I.
Vendor of meals, a retailer or other
person selling meals, as defined under M.G.L. c. 64H, §
6(h).
(3)
General Rule. The Massachusetts sales tax is an excise
on retail sales of tangible personal property or taxable services in
Massachusetts. M.G.L. c. 64H, § 2. A complementary use tax is imposed on
tangible personal property or taxable services purchased for storage, use or
consumption in Massachusetts. M.G.L. c. 64I, § 2. The sale of tangible
personal property or taxable services by any person to be delivered, shipped,
or brought into Massachusetts within six months after purchase is presumed to
be sold for use, storage, or other consumption in Massachusetts until the
contrary is established. Tangible personal property or taxable services need
not be used exclusively within Massachusetts or even primarily in Massachusetts
for the use tax to apply. The use tax does not apply where sales tax has been
collected or where the transaction is exempt from sales or use tax by statute.
Generally the sales tax is collected by the vendor from the
purchaser, and the vendor then remits the sales tax to the Commissioner.
Certain out-of-state vendors are required to collect the Massachusetts sales or
use tax. Some out-of-state vendors, although not so required, collect and remit
the Massachusetts tax as a convenience to Massachusetts customers.
Sales and use taxes collected are
reported together using the Form ST-9 series of returns. The filing and payment
schedule for such vendors is provided in 830 CMR 62C.16.2(4).
If the Massachusetts sales or use tax due is not collected by
the vendor, a purchaser owes use tax on the storage, use or consumption of the
tangible personal property in Massachusetts and must pay this directly to the
Commissioner. If the purchaser is a vendor reporting sales and/or use taxes
collected, the vendor reports any use tax due
resulting from its own purchases on that same sales
and use tax return. If the purchaser is not a vendor reporting sales/use tax
collected, purchases are reported on a separate return
as provided in 830 CMR 62C.16.2(5).
(4)
Filing and Payment Schedule
for Vendors.
(a)
General. As of January 1, 1998, every vendor required
to file a sales and use tax return under M.G.L. c. 62C, § 16(h), must file
a return and pay the tax due on an annual, quarterly or monthly
basis.
(b)
Annual
returns. Every vendor whose sales and use tax liability (exclusive
of the sales tax on meals) is reasonably estimated to be $100 or less for the
calendar year must file a sales and use tax return and pay the tax due on an
annual basis. The sales and use tax return and payment for the period of
January 1st to December 31st, inclusive, is due on or before the following
January 20th.
(c)
Quarterly returns. Every vendor whose sales and use
tax liability (exclusive of the sales tax on meals) is reasonably estimated to
be more than $100 but not more than $1,200 for the calendar year must file a
sales and use tax return and pay the tax due for each calendar quarter on or
before the 20th day of the month following the close of that calendar
quarter.
(d)
Monthly
returns. Every vendor whose sales and use tax liability (exclusive
of the sales tax on meals) is reasonably estimated to be more than $1,200 for
the calendar year must file a sales and use tax return and pay the tax due for
each calendar month on or before the twentieth day of the following calendar
month.
(e)
Reducing
filing frequency. The filing schedule chosen at the time the
vendor's first sales and use tax return is due must be followed for the entire
calendar year. If a vendor pays more or less sales and use tax over the course
of the calendar year than was originally estimated to be due, the Commissioner
will change the vendor's filing frequency to the correct schedule in the
following year. Vendors may not change their filing frequency on their own at
any time during the course of the calendar year.
(f)
Sales tax on
meals.
1.
Monthly
returns. As of January 1, 1998, every vendor of meals must file a
sales tax on meals return (Form ST-MAB-4) and pay the tax due for each calendar
month on or before the 20th day of the following calendar month.
2.
Other taxable
sales. If a vendor of meals makes sales in the regular course of
its business, other than sales of meals, that are subject to the sales tax, the
vendor of meals must file a sales and use tax return and pay the tax due on
those sales according to the rules set out in 830 CMR 62C.16.2(4)(a) through
(d). A vendor of meals must file a separate return for sales tax due for sales
of meals. Filing a return for sales tax due for sales of meals is not
considered a filing for sales and/or use tax due on the sale or purchase of
other tangible personal property or services. A separate sales and use tax
return must be filed for sales and/or use tax due on the sale or purchase of
other tangible personal property or services.
(5)
Filing and Payment Schedule
for Use Tax on Purchases.
(a)
General. Every purchaser required to file a use tax
return under M.G.L. c. 62C, § 16(i) must file a return and pay the use tax
due on an annual basis, or otherwise, as specified below. A purchaser's
presentation of a receipt from a registered vendor for the payment of the sales
tax or use tax in the manner and form prescribed by the Commissioner relieves
the purchaser from further liability for the use tax for the period or
transaction to which the receipt refers.
(b)
Special rule for boats and
airplanes. Every purchaser of a boat or airplane, for which sales
tax has not been paid, must file a use tax return and pay the use tax on the
20th day of the month following the first use, storage, or other consumption of
such boat or airplane within Massachusetts.
(c)
Special rule for motor
vehicles, trailers or other vehicles. Every purchaser of a motor
vehicle, trailer or other vehicle who is required to register or title the
vehicle in Massachusetts must file Form RMV-1 and pay a sales or use tax to the
Registrar of Motor Vehicles within ten days following the date of purchase,
transfer or use of such vehicle within Massachusetts. Every purchaser of a
vehicle who is not required to register or title the vehicle in Massachusetts
must file a completed Sales Tax Payment Form (Form ST-7R) and pay the tax to
the Commissioner on the 20th day of the month following the month of purchase,
transfer or use in Massachusetts.
See the Motor Vehicles regulation,
830 CMR
64H.25.1(4), for more
detailed information.
(d)
Fuel purchasers. If a purchaser of fuel, as defined
under M.G.L. c. 64A, § 1(d), special fuels, as defined under M.G.L. c.
64E, § 1(d), or aircraft (jet) fuel, as defined under M.G.L. c. 64J,
§ 1(a), has paid tax due under those chapters and consumes the fuel in a
manner not taxable under those chapters, the purchaser is entitled to a refund
of the fuel excise, but the fuel purchase may be subject to sales or use tax.
Sales or use tax due, for fuel upon which a fuel excise has been paid, must be
paid with the purchaser's application for refund of the fuel excise. Generally,
the sales and/or use tax due is deducted from the amount of the fuel excise
refund.
(e)
Individual
purchasers. If no Massachusetts sales tax is paid, an individual
purchaser of taxable services or tangible personal property (other than boats,
airplanes, motor vehicles, trailers or other vehicles, fuels, special fuels,
and aircraft (jet) fuel for which fuel excise has been paid) must file a use
tax return (Form ST-11) and pay the tax due on such services or property on an
annual basis, regardless of the amount of the use tax liability. The use tax
return and payment is due on or before April 15 of the calendar year following
purchase.
(f)
Business
purchasers who are not registered vendors and are not required to be registered
vendors. If no Massachusetts sales tax is paid, a business
purchaser of taxable services or tangible personal property (other than boats,
airplanes, motor vehicles, trailers or other vehicles, fuels, special fuels,
and aircraft (jet) fuel for which fuel excise has been paid) who is not
registered or required to register as a vendor with
the Commissioner pursuant to M.G.L. c. 62C, § 67, must file a use tax
return (Form ST-10) and pay the tax due on such services or property on an
annual basis, regardless of the amount of the use tax liability. The use tax
return and payment is due on or before April 15 of the calendar year following
purchase. A business purchaser is not required to register as a use tax
purchaser with the Commissioner for use tax purposes
but may do so, using Form TA-1. Whether or not registered as a purchaser, such
purchaser's use tax is due April 15 of the calendar year following
purchase.
(g)
Business
purchasers who are registered vendors. Every purchaser who is
registered as a vendor, or who is required to be registered as a vendor with
the Commissioner pursuant to M.G.L. c. 62C, § 67, must report any use tax
due on its purchases on its sales and use tax return and pay the tax due
according to a reporting schedule based upon the vendor's combined sales and
use tax liability, as explained in
830
CMR 62C.16.2(4),
above.
(h)
Business
purchasers who are vendors of meals. Often a vendor of meals will
also be a vendor of other tangible personal property or taxable services. If
this is the case, use tax due on purchases must be reported on and paid with
the vendor's sales and use tax return. If the vendor of meals files only a
sales tax on meals return, and not a sales and use tax return, use tax due on
its purchases must be reported on Form ST-10, due April 15 of the calendar year
following purchase. See
830
CMR 62C.16.2(4)(f)2.
(6)
Administrative Provisions.
(a)
Penalties.
1.
Penalty for failure to file
timely. A penalty is imposed for failure to file a sales or use
tax return on or before the due date of the sales or use tax return or within
any extension of time for payment granted by the Commissioner. The penalty is
1% of the amount of tax required to be shown on the return, computed for each
month or fraction of a month during which the failure continues, not exceeding
in the aggregate 25% of that amount. In computing the penalty for failure to
file timely, the amount of tax required to be shown on the return will be
reduced by the amount of any part of the tax which was paid on or before the
date prescribed for payment of the tax and by the amount of any credit against
the tax which may be claimed upon the return.
2.
Penalty for failure to pay
timely. A penalty is imposed for failure to pay a sales or use tax
on or before the due date of the sales or use tax return or within any
extension of time for payment granted by the Commissioner. The penalty is
1/2 of 1% of the amount of unpaid tax shown on the return, for each month
or fraction of a month during which the failure continues, not exceeding in the
aggregate 25% of that amount. In computing the penalty for failure to pay
timely, the amount of tax shown on the return will be reduced by the amount of
any part of the tax which is paid before the beginning of that month.
3.
Penalty for failure to pay
assessment timely. A penalty is imposed for failure to pay an
assessment of sales or use tax not reported on a sales or use tax return,
within thirty days following the date of the Notice of Assessment by the
Commissioner. The penalty is 1/2 of 1% of the amount of the unpaid
assessed tax for each month or fraction of a month during which the failure
continues, not exceeding in the aggregate 25% of that amount.
(b)
Interest. Any portion of the sales or use tax that is
not paid on or before the due date of a sales or use tax return will have added
to it, interest from the due date of the return to the date the tax is paid at
a rate prescribed by M.G.L. c. 62C, § 32.
(c)
Revocation of authority to
file annually, quarterly or monthly. The authorization to file a
return and to pay the tax due on an annual, quarterly or monthly basis may be
revoked by the Commissioner if:
1. The vendor
or purchaser is delinquent in filing a return or paying the tax due;
2. The vendor's or purchaser's tax liability
exceeds the designated amounts of $100 or $1,200 for any calendar year, as the
case may be; or
3. The Commissioner
determines that the annual, quarterly or monthly filing of returns and payment
of tax due unduly jeopardizes the proper administration of the tax law. Upon
such revocation, the vendor or purchaser will be required to file a return and
to pay the tax due on such basis as the Commissioner shall determine.
(7)
Sales
Tax Filing and Payment Schedule for Certain Vendors during COVID-19
Pandemic. Notwithstanding
830
CMR 62C.16.2(3) through (6),
with respect to vendors whose cumulative liability in the 12-month period
ending February 29, 2020 for returns required to be filed under M.G.L. c. 62C,
§ 16(h) and (i) is less than $150,000, returns and payments otherwise due
during the period beginning March 20, 2020 and ending June 1, 2021 shall be
suspended. All such returns and payments, including any local option amounts,
shall be due on October 30, 2021. This suspension does not apply to marijuana
retailers as defined in M.G.L. c. 94G, § 1, marketplace facilitators or
vendors selling motor vehicles. Such vendors shall continue to file returns and
make payments in accordance with the rules set forth in
830
CMR 62C.16.2(3) through
(6).
