Current through Register 1518, March 29, 2024
(1)
Statement of Purpose, Effective Date, Outline of
Topics.
(a)
Statement
of Purpose. The purpose of 830 CMR 64H.8.1 is to explain the
requirements for the presentation and acceptance of resale certificates for
sales of tangible personal property and taxable services, the requirements for
the presentation and acceptance of exempt use certificates for sales of
tangible personal property, and the rules for determining when sales of
property or taxable services are sales for resale.
(b)
Effective Date.
830 CMR 64H.8.1 applies to the sale or use of tangible personal property and
taxable services, except gas, steam, electricity, heating fuel or taxable
services sold or used before September 1, 1990. However, 830 CMR 64H.8.1(4)(d)
and 830 CMR 64H.8.1(5)(d) are effective as of March 6, 1991.
(c)
Outline of
Topics. 830 CMR 64H.8.1 is organized as follows:
1. Statement of Purpose, Effective Date,
Outline of Topics.
2.
Definitions.
3. General
Rule.
4. Sales for
Resale.
5. Sales for Exempt
Use.
(2)
Definitions. For the purpose of 830 CMR 64H.8.1, the
following terms have the following meanings, unless the context requires
otherwise:
Commissioner. The Commissioner of
Revenue or the Commissioner's duly authorized representative.
Exempt Use Certificate, Form ST-12. A
certificate, prescribed by the Commissioner, certifying that tangible personal
property is purchased for a use exempt under M.G.L. c. 64H, § 6(r) or
(s).
Resale Certificate, Form ST-4. A
certificate prescribed by the Commissioner, certifying that taxable services or
tangible personal property are purchased for resale in the regular course of
business.
Retail Sale. 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, including gas, steam, electricity, and heating fuel, but
excluding rights and credits, insurance policies, bills of exchange, stocks,
bonds, and similar evidences of indebtedness or ownership.
Tax. The excise tax imposed under
M.G.L. c. 64H or M.G.L c. 64I.
Taxable Service or Taxable Services.
Any activities engaged in by a person for consideration that are subject to the
tax imposed by M.G.L. c. 64H or M.G.L c. 64I, whether or not such activities
are the primary activity of the person providing the service. Taxable services
are limited to telecommunications services.
Telecommunications Services, any
transmission of messages or information by electronic or similar means, between
or among points by wire, cable, fiber-optics, laser, microwave, radio,
satellite, or similar facilities, but not including cable television.
See
830 CMR
64H.1.6, Telecommunications Services.
Vendor, a retailer or other person
selling taxable services or tangible personal property 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.
(3)
General Rule.
All gross receipts of a vendor from the sale of tangible personal property or
taxable services are presumed to be from retail sales subject to tax until the
contrary is established. The burden of proving that a sale is not a retail sale
is on the vendor unless the vendor takes a resale certificate from the
purchaser, under the conditions of M.G.L. c. 64H, § 8; M.G.L. c. 64I,
§ 8 and 830 CMR 64H.8.1(4). The burden of proving that a sale is exempt
under M.G.L. c. 64H or c. 64I is on the vendor unless the vendor takes an
exempt use certificate from the purchaser, under the conditions of M.G.L. c.
64H, § 8; M.G.L. c. 64I, § 8, and 830 CMR 64H.8.1(5).
(4)
Sales of Tangible Personal
Property and Taxable Services for Resale.
(a)
Presumptions and burdens of
proof.
1. Sales tax. The burden
of proving that a sale of tangible personal property or taxable services is not
a retail sale is on the vendor unless the vendor accepts a resale certificate
from the purchaser, under the conditions of M.G.L. c. 64H, §§ 8(a)
through (d), and 830 CMR 64H.8.1.
2. Use tax. Tangible personal property that
the purchaser accepts within Massachusetts or that the vendor or a licensed
carrier on behalf of the vendor delivers to the purchaser within Massachusetts
is presumed to be sold for use, storage, or other consumption in Massachusetts
until the contrary is established. The burden of proving the contrary is on the
vendor unless the vendor accepts a resale certificate from the purchaser, under
the conditions of M.G.L. c. 64I, §§ 8(a)-(e), and 830 CMR
64H.8.1.
(b)
Good faith requirement for resale certificates. A
resale certificate relieves a vendor from the burden of proving that a sale of
tangible personal property or taxable service is not a retail sale only if the
vendor accepts the resale certificate in good faith from a purchaser who is
engaged in the business of selling tangible personal property or taxable
services, and who, at the time of the purchase, intends to sell the tangible
personal property or taxable service in a retail sale in the regular course of
business or is unable to ascertain at the time of purchase whether the tangible
personal property or taxable service will be sold or will be used for some
other purpose.
(c)
Requirements for proper resale certificates. Each
resale certificate must be in the form prescribed by the Commissioner and must
contain the following information:
1. Name of
purchaser;
2. Address of
purchaser;
3. Purchaser's
registration number;
4. Any other
information the Commissioner may require.
(d)
60-day rule for production
and correction of resale certificates. The rules below apply to
resale certificates for sales of tangible personal property and resale
certificates for sales of taxable services.
1.
Commissioner's notice to produce resale certificates.
a. Upon written notice to a vendor, the
Commissioner may require the vendor to produce particular resale certificates
accepted during any period for which a tax return has been filed or for which a
return is due. The vendor must make the requested resale certificates available
for inspection by the Commissioner within 60 days of the date of the
Commissioner's notice.
b. If the
vendor does not produce the requested resale certificates within the 60-day
period, the vendor must carry the burden of proving, by other evidence, that
the sale was not a retail sale subject to tax.
c. If the vendor, within the 60 days of the
original notice, produces any requested resale certificates that the
Commissioner then determines are deficient in some material manner, the vendor
must correct such resale certificates within the same 60-day period, calculated
from the date of the original notice.
2. Commissioner's notice to correct resale
certificates.
a. If the Commissioner notifies
any vendor in writing that a resale certificate not previously subject to the
60-day rule for production is deficient in some material manner, the vendor
must correct the resale certificate within 60 days from the date of the
Commissioner's notice.
b. If the
vendor does not correct the particular resale certificate within the 60-day
period, the vendor must carry the burden of proving, by other evidence, that
the sale was not a retail sale subject to tax.
(e)
Use of tangible personal
property or taxable services by purchasers. If a purchaser
presents a resale certificate with respect to the purchase of tangible personal
property or a taxable service and subsequently makes any use of the property or
service, other than retention, demonstration, or display while holding it for
sale in the regular course of business, the use is deemed to be a retail sale
by the purchaser as of the time the property or service is first used by the
purchaser, and the cost of the property or service to the purchaser must be
included in the purchaser's gross receipts.
(f)
Special Requirements for
Presentation of Resale Certificates for Purchases of Telecommunications
Services. For rules regarding the use of resale certificates in
connection with purchases of telecommunications services, see
830 CMR
64H.1.6 (Telecommunications
Services).
(5)
Sales for Exempt Use.
(a)
Acceptance of exempt use
certificates. If a purchaser purchases tangible personal property
for a purpose that qualifies for exemption from the tax under M.G.L. c. 64H, or
M.G.L. c. 64I, the purchaser may present an exempt use certificate to the
vendor to certify that the tangible personal property will be used in an exempt
manner. The burden of proving that a sale of tangible personal property is
exempt under M.G.L. c. 64H or M.G.L. c. 64I is on the vendor unless the vendor
accepts an exempt use certificate from the purchaser, under the conditions of
M.G.L. c. 64H, §§ 8(e) through (h); M.G.L. c. 64I, §§ 8(g)
through (j), and 830 CMR 64H.8.1. A purchaser may not present, and a vendor may
not accept, an exempt use certificate for a purchase of taxable
services.
(b)
Good
faith requirement for exempt use certificates. An exempt use
certificate relieves the vendor from the burden of proof that a sale of
tangible personal property is for exempt use only if the vendor accepts the
certificate in good faith from a purchaser who, at the time of purchasing the
tangible personal property, intends to use the property in a manner that
qualifies for an exemption under M.G.L. c. 64H, or M.G.L. c. 64I, or who is
unable to ascertain at the time of purchase whether the tangible personal
property will be used in an exempt manner or will be used for some other
purpose.
(c)
Requirements for proper exempt use certificates. Each
exempt use certificate must be in the form prescribed by the Commissioner and
must contain the following information:
1.
Name of purchaser;
2. Address of
purchaser;
3. Purchaser's
registration number, if any;
4. The
general character of the tangible personal property purchased;
5. Certification of the exempt use to which
the tangible personal property will be applied; and
6. Any other information the Commissioner may
require.
(d)
60-day rule for production and correction of
certificates. The rules below apply to exempt use certificates for
sales of tangible personal property.
1.
Commissioner's notice to produce certificates.
a. Upon written notice to a vendor, the
Commissioner may require the vendor to produce particular exempt use
certificates accepted during any period for which a tax return has been filed
or for which a return is due. The vendor must make the requested exempt use
certificates available for inspection by the Commissioner within 60 days of the
date of the Commissioner's notice.
b. If the vendor does not produce the
requested certificates within the 60-day period, the vendor must carry the
burden of proving, by other evidence, that the sale was not a retail sale
subject to tax.
c. If the
Commissioner determines that any of the produced certificates are deficient in
some material manner, the vendor must correct the certificates within the same
60-day period, calculated from the date of the original notice.
2. Commissioner's notice to
correct certificates.
a. If the Commissioner
notifies any vendor in writing that a certificate not previously subject to the
60-day rule for production is deficient in some material manner, the vendor
must correct the certificate within 60 days from the date of the Commissioner's
notice.
b. If the vendor does not
correct the particular certificates within the 60-day period, the vendor must
carry the burden of proving, by other evidence, that the sale was not a retail
sale subject to tax.
(e)
Nonexempt use of tangible
personal property by purchaser. If a purchaser who presents an
exempt use certificate for the purchase of tangible personal property makes any
use of property other than a use that is exempt under M.G.L. c. 64H or M.G.L.
c. 64I, the use is deemed to be a retail sale by the purchaser as of the time
the service is first used by the purchaser, and the cost of the tangible
personal property to the purchaser must be included in the purchaser's gross
receipts.
(f)
Sales of
taxable services. None of the exempt use provisions of M.G.L. c.
64H or M.G.L. c. 64I apply to sales of taxable services. Therefore, a purchaser
may not present, and a vendor may not accept, an exempt use certificate with
respect to a sale of a taxable service.