Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The definition of "Sale" and "Selling" in section 1 of chapter 64H of the General Laws, as appearing in section 42 of chapter 121 of the acts of 1990, is hereby amended by inserting after the word "persons", in line 17, the words:- , but excluding the furnishing of information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons, and excluding the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, radio broadcasters and television broadcasters in the collection and dissemination of news.

SECTION 2. The definition of "Sale at retail" or "retail sale" in said section 1 of said chapter 64H, as so appearing, is hereby amended by striking out the fourth sentence and inserting in place thereof the following sentence:- The term "sale at retail" or "retail sale" shall not include (a) sales of tickets for admissions to places of amusement and sports; (b) sales of transportation services; (c) professional, insurance, or personal service transactions which involve no sale or which involve sales as inconsequential elements for which no separate charges are made; or (d) any sale in which the only transaction in the commonwealth is the mere execution of the contract of sale and in which the tangible personal property sold is not in the commonwealth at the time of such execution; provided, however, that nothing contained in this definition shall be construed to be an exemption from the tax imposed under chapter sixty-four I.

SECTION 3. Said section 1 of said chapter 64H is hereby further amended by striking out the definition of "Sales price", as so appearing, and inserting in place thereof the following definition:-

"Sales price", the total amount paid by a purchaser to a vendor as consideration for a retail sale, valued in money or otherwise. In determining the sales price, the following shall apply: (a) no deduction shall be taken on account of (i) the cost of property sold; (ii) the cost of materials used, labor or service cost, interest charges, losses or other expenses; (iii) the cost of transportation of the property prior to its sale at retail; (b) there shall be included (i) any amount paid for any services that are a part of the sale; and (ii) any amount for which credit is given to the purchaser by the vendor; and (c) there shall be excluded (i) cash discounts allowed and taken on sales; (ii) the amount charged for property returned by purchasers to vendors upon rescission of contracts of sale when the entire amounts charged therefor, less the vendors' established handling fees, if any, for such return of property, are refunded either in cash or credit, and when the property is returned within ninety days from the date of sale, and the entire sales tax paid is returned to the purchaser; provided, however, that where a motor vehicle is returned pursuant to a rescission of contract such motor vehicle must be returned within one hundred and eighty days of the date of sale; (iii) the amount charged for labor or services rendered in installing or applying the property sold; (iv) the amount of reimbursement of tax paid by the purchaser to the vendor under this chapter; (v) transportation charges separately stated, if the transportation occurs after the sale of the property is made; and (vi) the amount of the manufacturers' excise tax levied upon motor vehicles under section 4061(a) of the Internal Revenue Code of 1954 of the United States, as amended.

SECTION 4. Said section 1 of said chapter 64H is hereby further amended by striking out the definition of "Costs of Performance".

SECTION 5. Said section 1 of said chapter 64H is hereby further amended by striking out the definition of "Services", as most recently amended by section 358 of chapter 150 of the acts of 1990, and inserting in place thereof the following definition:-

"Services", a commodity consisting of activities engaged in by a person for another person for a consideration; provided, however, that the term "services" shall not include activities performed by a person who is not in a regular trade or business offering his services to the public, and shall not include services rendered to a member of an affiliated group, as defined by section 1504 of the Internal Revenue Code, by another member of the same affiliated group that does not sell to the public the type of service provided to its affiliate; and provided, further, that the term services shall be limited to the following item: telecommunications services. Nothing herein shall exempt from tax sales of tangible personal property subject to tax under this chapter.

SECTION 6. Said section 1 of said chapter 64H is hereby further amended by striking out the definition of "Sic".

SECTION 7. Section two A of said chapter sixty-four H is hereby repealed.

SECTION 7A. Paragraph (a) of section 3 of said chapter 64H, as appearing in the 1988 Official Edition, is hereby amended by striking out, in lines 1 and 2, the words "paragraphs (b) and (c) of this section" and inserting in place thereof the word:- paragraph (c).

SECTION 8. Said section 3 of said chapter 64H is hereby further amended by striking out paragraph (b), as most recently amended by section 45 of chapter 121 of the acts of 1990.

SECTION 9. Section 6 of said chapter 64H, as most recently amended by section 363 of chapter 150 of the acts of 1990, is hereby further amended by striking out paragraphs (mm), (nn) and (oo).

SECTION 10. Paragraph (qq) of said section 6 of said chapter 64H, inserted by section 352 of said chapter 150, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- Sales of gas, steam, electricity or heating fuel to any business which has five or fewer employees.

SECTION 11. Section 8 of said chapter 64H, as amended by section 53 of chapter 121 of the acts of 1990, is hereby further amended by striking out paragraphs (f), (g), (h) and (i) and inserting in place thereof the following four paragraphs:-

(f) The exempt use certificate shall relieve the vendor from the burden of proof only if taken in good faith for the purchase of property from a person who is engaged in an activity described in paragraph (r) or (s) of section six, and who, at the time of purchasing the tangible personal property, intends to use the property in an exempt manner or is unable to ascertain at the time of purchase whether the property will be used in an exempt manner or will be used for some other purpose, and such certificate is received and made available to the commissioner not later than sixty days from the date of notice from the commissioner to produce such certificate. Where a certificate is received within the foregoing time limit but is deficient in some material manner, and where such deficiency is thereafter removed, also within the sixty day limit, the receipt of such certificate shall be deemed to have satisfied the foregoing time requirement.

(g) The exempt use certificate shall be signed by and bear the name and address of the purchaser and the number of his registration, if any, give a description of the property being purchased, certify the exempt use to which the property will be applied and be in such form as the commissioner may prescribe.

(h) If a purchaser who gives an exempt use certificate makes any use of the property other than the one therein certified, the use shall be deemed a retail sale by the purchaser as of the time the property is first so used and the cost of the property to him shall be deemed the gross receipts from such retail sale.

(i) The commissioner may promulgate regulations determining which services shall be deemed purchased for resale under this section, containing provisions for the issuance of certificates to the effect that services are purchased for resale.

SECTION 12. Said chapter 64H is hereby further amended by inserting after section 27 the following section:-

Section 27A. Where a trade-in of a boat is received by a dealer in boats holding a valid vendor's registration, upon the sale of another boat to a consumer or user, the tax shall be imposed only on the difference between the sale price of the boat purchased and the amount allowed on the boat traded in on such purchase. When any such boat traded in is subsequently sold to a consumer or user, the tax provided for in this section shall apply.

Where a trade-in of an airplane is received by a dealer in airplanes, who has registered his federal dealer's aircraft registration, upon the sale of another airplane to a consumer or user, the tax shall be imposed only on the difference between the sales price of the airplane purchased and the amount allowed on the airplane traded in on such purchase. When any airplane traded in is subsequently sold to a consumer or user, the tax provided for in this section shall apply.

SECTION 13. Section two A of chapter sixty-four I of the General Laws is hereby repealed.

SECTION 14. Section 8 of said chapter 64I, as amended by section 64 of chapter 121 of the acts of 1990, is hereby further amended by striking out paragraphs (a) and (b) and inserting in place thereof the following paragraph:-

(a) For the purpose of the proper administration of this chapter and to prevent evasion of the tax imposed hereunder, it shall be presumed that tangible personal property or services sold by any person for delivery in the commonwealth is sold for storage, use or other consumption in the commonwealth until the contrary is established. The burden of proving the contrary is upon the person who makes the sale unless he takes from the purchaser a certificate to the effect that the service or property is purchased for resale and such certificate is received and made available to the commissioner not later than sixty days from the date of notice from the commissioner to produce such certificate. Where a certificate is deficient in some material manner and where such deficiency is thereafter removed, also within said sixty day period, the receipt of such certificate shall be deemed to have satisfied the foregoing time limit.

SECTION 15. Said section 8 of said chapter 64I, as amended by said section 64 of said chapter 121, is hereby further amended by striking out paragraphs (h), (i), (j) and (k) and inserting in place thereof the following four paragraphs:-

(h) The exempt use certificate shall relieve the vendor from the burden of proof only if taken in good faith for the purchase of property from a person who is engaged in an activity described in paragraph (r) or (s) of section six of chapter sixty-four H, and who, at the time of purchasing the tangible personal property, intends to use the property in an exempt manner or is unable to ascertain at the time of purchase whether the property will be used in an exempt manner or will be used for some other purpose and such certificate is received and made available to the commissioner not later than sixty days from the date of notice from the commissioner to produce such certificate. Where a certificate is received within the foregoing time limit, but is deficient in some material manner and where such deficiency is thereafter removed, also within said sixty day limit the receipt of such certificate shall be deemed to have satisfied the foregoing time requirement.

(i) The exempt use certificate shall be signed by and bear the name and address of the purchaser and the number of his registration, give a description of the property being purchased, certify the exempt use to which the property will be applied and be in such form as the commissioner may prescribe.

(j) If a purchaser who gives an exempt use certificate stores or makes any use of the property other than the one therein certified, the storage or use shall be deemed a retail sale by the purchaser as of the time the property is first so stored or used and the cost of the property to him shall be deemed the gross receipts from such retail sale.

(k) The commissioner may promulgate regulations determining which services shall be deemed purchased for resale under this section, containing provisions for the issuance of certificates to the effect that services are purchased for resale.

SECTION 16. The provisions of chapters sixty-four H and sixty-four I of the General Laws, as amended by the provisions of this act shall apply to the sale, use, storage or other consumption of tangible personal property and services in the commonwealth made or occurring on or after March sixth, nineteen hundred and ninety-one. Any vendor who collects any sales or use taxes upon transactions heretofore taxable and now exempt under this act shall make reasonable efforts to return such sales or use taxes to any purchasers of such services.