Governor Deval Patrick's Budget Recommendation - House 1 Fiscal Year 2014

Sales Tax - All Detail

Fiscal Year 2014 Sales Tax (in Millions)
TAX EXPENDITURE
FY2012
FY2013
FY2014
3.000 - Exempt Entities 393.3 411.5 438.9
3.100 - Exempt Products/Services 1,459.0 1,511.1 1,573.3
3.200 - Exempt, Taxed Under Another Excise 972.6 977.2 1,010.8
3.300 - Exempt Component of a Product or Consumed in Production 880.2 890.0 902.6
3.400 - Exemptions for Specified Uses of Products/Services 937.8 947.2 987.3
3.600 - Miscellaneous Exemptions 118.9 123.3 128.5

 

Fiscal Year 2014 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014
Exempt Entities 393.3 411.5 438.9

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item description amount
Exempt Entities 438.9
3.001 Exemption for Sales to the Federal Government
Sales to the federal government are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(d)
Estimate:  N.A.
 
 N.A.
3.002 Exemption for Sales to the Commonwealth
Sales to the Commonwealth, its agencies and political subdivisions are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(d)
Estimate:  N.A.
 
 N.A.
3.003 Exemption for Sales to Tax-Exempt Organizations
Non-profit organizations are exempt from sales tax on purchases of goods and services to be used in carrying out their tax-exempt purposes.

Comment: This estimate excludes sales of building materials and supplies used in construction contracts, which are covered under item 3.412.

Origin:  M.G.L. c. 64H, S. 6(e) and (x)
Estimate:  $438.6
 
 438.6
3.004 Exemption for Sales of Tangible Personal Property to Motion Picture Production Companies
Sales of tangible personal property to a qualifying motion picture production company or to an accredited film school student for the production expenses related to a school film project are exempt from the sales tax.

Origin:  M.G.L. c. 64H, S. 6(ww)
Estimate:  $0.1
 
 0.1
3.005 Exemption for Sales of Certain Tangible Personal Property Purchased for a Certified Life Sciences Company
Sales of tangible personal property purchased for a certified life sciences company, to the extent authorized pursuant to the life sciences tax incentive program, for use in connection with the construction, alteration, remodeling, repair or remediation of research, development or manufacturing facilities and utility support systems, are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(xx)
Estimate:  $0.2
 
 0.2

 

Fiscal Year 2014 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014
Exempt Products/Services 1,459.0 1,511.1 1,573.3

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item description amount
Exempt Products/Services 1,573.3
3.101 Exemption for Food
Food for human consumption is exempt from sales tax, including food purchased with federal food stamps. The exemption does not cover meals served in restaurants and similar establishments. Meals are taxed under the sales tax at a rate of 6.25%.

Origin:  M.G.L. c. 64H, S. 6(h) and (kk)
Estimate:  $714.5
 
 714.5
3.102 Exemption for Certain Food and Beverages Sold in Restaurants
Although generally food and beverages sold in restaurants are taxed, there are certain exceptions. These are: a) food sold by weight, measure, count, or in unopened original containers or packages (for example, milk, meat, bread); b) beverages in unopened original containers which have a capacity of at least 26 fluid ounces; and c) bakery products sold in units of six or more.

Origin:  M.G.L. c. 64H, S. 6(h)
Estimate:  N.A.
 
 N.A.
3.103 Exemption for Clothing
Sales of clothing or footwear up to $175 per item are exempt from sales tax. The exemption does not include special clothing or footwear designed for athletic or protective uses and not normally worn except for these uses.

Origin:  M.G.L. c. 64H, S. 6(k)
Estimate:  $283.4
 
 283.4
3.104 Exemption for Medical and Dental Supplies and Devices
Medical and dental supplies and devices, such as prescription drugs, oxygen, blood, artificial limbs and eyeglasses, are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(l) and (z)
Estimate:  $477.1
 
 477.1
3.105 Exemption for Water
Sales and service of water are exempt from sales tax.

Comment: This estimate excludes sales of bottled water, which are included under item 3.101.

Origin:  M.G.L. c. 64H, S. 6(i)
Estimate:  $49.8
 
 49.8
3.106 Exemption for Newspapers and Magazines
Newspapers and magazines are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(m)
Estimate:  $36.0
 
 36.0
3.107 Exemption for the American Flag
The American flag is exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(w)
Estimate:  N.A.
 
 N.A.
3.108 Exemption for Certain Precious Metals
Sales valued at $1,000 or more of the following precious metals are exempt from the sales tax: rare coins of numismatic value; gold or silver bullion or coins; and gold or silver tender of any nation which is traded and sold according to its value as precious metal. Fabricated precious metals that have been processed or manufactured for industrial, professional, or artistic use do not qualify for the exemption.

Origin:  M.G.L. c. 64H, S. 6(ll)
Estimate:  N.A.
 
 N.A.
3.109 Exemption for Cement Mixers
Concrete mixing units mounted on the back of trucks are exempt from sales tax. Spare parts for such units are also exempt. The truck chassis is subject to sales tax.

Origin:  M.G.L. c. 64H, S. 6(y)
Estimate:  N.A.
 
 N.A.
3.112 Exemption for Aircraft & Aircraft Parts
Airplanes, helicopters, balloons and other aircraft are exempt from sales tax. Also exempt are parts used exclusively for the repair of aircraft.

Origin:  M.G.L. c. 64H, S. 6(uu) and (vv)
Estimate:  $12.4
 
 12.4
3.113 Exemption for Breast Pumps
Physician-prescribed, medically necessary breast pumps are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(l)
Estimate:  included in 3.104
 
 included in 3.104

 

Fiscal Year 2014 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014
Exempt, Taxed Under Another Excise 972.6 977.2 1,010.8

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item description amount
Exempt, Taxed Under Another Excise 1,010.8
3.201 Exemption for Alcoholic Beverages
Alcoholic beverages, except those sold as part of a meal, were exempt from sales tax through July 31, 2009. Effective August 1, 2009, this exemption was repealed. However, as the result of a referendum question on the November 2, 2010 ballot, this exemption is reinstated, effective for sales on or after January 1, 2011. Alcoholic beverages are also subject to an excise tax determined by volume.

Comment: Revenues collected under the alcoholic beverages excise were $72.7 million in Fiscal Year 2011 and $76.1 million in Fiscal Year 2012.

Origin:  M.G.L. c. 64H S. 6(g)
Estimate:  $116.6
 
 116.6
3.202 Exemption for Motor Fuels
Motor fuels are exempt from sales tax. They are subject to an excise at a rate higher than 6.25% of the retail price. The estimate represents revenues that would be collected under the sales tax if motor fuels were taxed at 6.25% of the retail price. The Massachusetts motor fuels tax rate is $0.21 per gallon of gasoline or diesel fuel.

Comment: Revenues collected under the motor fuels excise were
$660.8 million in Fiscal Year 2011 and $662.0 million in Fiscal Year 2012.

Origin:  M.G.L. c. 64H, S. 6(g)
Estimate:  $750.0
 
 750.0
3.203 Exemption for Hotel/Motel Rooms
Rental charges for real property are exempt from sales tax. However, rentals of rooms in hotels, motels or lodging houses are subject to a state excise at a rate of 5.7% of the rental price, and, at a municipality's option, to a local excise of up to 6% of the rental price (6.5% in the city of Boston). A Convention Center financing fee of 2.75% is also included in certain areas.

Comment: Revenues collected under the budgeted state room excise were
$110.4 million in Fiscal Year 2011 and $121.6 million in Fiscal Year 2012.

Origin:  General exclusion of real property transactions
Estimate:  $144.1
 
 144.1

 

Fiscal Year 2014 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014
Exempt Component of a Product or Consumed in Production 880.2 890.0 902.6

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item description amount
Exempt Component of a Product or Consumed in Production 902.6
3.301 Exemption for Items Used in Making Clothing
Sales of materials used in making clothes, such as thread and fabric, are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(v)
Estimate:  N.A.
 
 N.A.
3.302 Exemption for Materials, Tools, Fuels and Machinery Used in Manufacturing
Materials, tools, fuels and machinery, including spare parts, used in manufacturing are exempt from sales tax if they become components of a product to be sold or are consumed or directly used in the manufacturing process.

Origin:  M.G.L. c. 64H, S. 6(r) and (s)
Estimate:  $618.1
 
 618.1
3.303 Exemption for Materials, Tools, Fuels and Machinery Used in Research and Development
Materials, tools, fuels and machinery, including spare parts, used in research and development by certified manufacturing or research and development corporations are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(r) and (s)
Estimate:  $89.4
 
 89.4
3.304 Exemption for Materials, Tools, Fuels, and Machinery Used in Furnishing Power
Materials, tools, fuels, and machinery, including spare parts, used in furnishing gas, water, steam, or electricity to consumers through mains, lines or pipes are exempt from sales tax if they are consumed or directly used in furnishing the power.

Comment: Estimate excludes costs associated with the natural gas industry due to a lack of reliable data.

Origin:  M.G.L. c. 64H, S. 6(r) and (s)
Estimate:  $104.3
 
 104.3
3.306 Exemption for Materials, Tools, Fuels, and Machinery Used in Newspaper Printing
Materials, tools, fuels, and machinery, including spare parts, used in newspaper printing are exempt from sales tax if they become components of a product to be sold or are consumed or directly used in newspaper publishing.

Origin:  M.G.L. c. 64H, S. 6(r) and (s)
Estimate:  $64.6
 
 64.6
3.308 Exemption for Materials, Tools, Fuels, and Machinery Used in Agricultural Production
Materials, tools, fuels, and machinery, including spare parts, used in agricultural production are exempt from sales tax if they become components of products to be sold or are consumed or directly used in agricultural production. The exemption includes the same items when used for the production of livestock, poultry and animals in research. Also included are seeds and plants used to grow food for human consumption outside the agricultural industry (e.g., by home gardeners).

Origin:  M.G.L. c. 64H, S. 6(r), (s) and (p)
Estimate:  $13.8
 
 13.8
3.309 Exemption for Vessels, Materials, Tools, Fuels, and Machinery Used in Commercial Fishing
Materials, tools, fuels, and machinery, including spare parts, used in commercial fishing are exempt from sales tax if they become components of a product to be sold or are consumed or directly used in commercial fishing.

Origin:  M.G.L. c. 64H, S. 6(r), (s) and (o)
Estimate:  $12.5
 
 12.5
3.310 Exemption for Materials, Tools, Fuels and Machinery Used in Commercial Radio and TV Broadcasting
Materials, tools, fuels and machinery, including spare parts, used in commercial radio and TV broadcasting are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(r) and (s)
Estimate:  N.A.
 
 N.A.

 

Fiscal Year 2014 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014
Exemptions for Specified Uses of Products/Services 937.8 947.2 987.3

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item description amount
Exemptions for Specified Uses of Products/Services 987.3
3.401 Exemption for Electricity
Residential electricity, electricity purchased by businesses with five or fewer employees, and electricity purchased for qualified industrial use is exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(i) and (qq)
Estimate:  $336.4
 
 336.4
3.402 Exemption for Fuel Used for Heating Purposes
Residential heating fuel, heating fuel purchased by businesses with five or fewer employees, and heating fuel purchased for qualified industrial use is exempt from sales tax.

Comment: This estimate is based on purchases of heating oil only; natural gas is included in item 3.403.

Origin:  M.G.L. c. 64H, S. 6(j) and (qq)
Estimate:  $87.2
 
 87.2
3.403 Exemption for Piped and Bottled Gas
Residential gas, gas purchased by businesses with five or fewer employees, and gas purchased for qualified industrial use is exempt from sales tax.

Comment: Estimate is for piped gas only.

Origin:  M.G.L. c. 64H, S. 6(i) and (qq)
Estimate:  $148.5
 
 148.5
3.404 Exemption for Steam
Residential steam, steam purchased by businesses with five or fewer employees, and steam purchased for qualified industrial use are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(i) and (qq)
Estimate:  $14.4
 
 14.4
3.405 Exemption for Certain Energy Conservation Equipment
Equipment for a solar, wind or heat pump system used as a primary or auxiliary energy source in a principal residence is exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(dd)
Estimate:  N.A.
 
 N.A.
3.406 Exemption for Funeral Items
Coffins, caskets, and other funeral items are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(n)
Estimate:  $12.9
 
 12.9
3.407 Exemption for a Motor Vehicle for a Paraplegic
A motor vehicle owned and registered for the personal use of a paraplegic is exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(u)
Estimate:  $1.3
 
 1.3
3.408 Exemption for Textbooks
Textbooks and other books required for instruction in educational institutions are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(m)
Estimate:  $51.9
 
 51.9
3.409 Exemption for Books Used for Religious Worship
Bibles, prayer books and other books used for religious worship are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(m)
Estimate:  N.A.
 
 N.A.
3.410 Exemption for Containers
Most containers are exempt from sales tax. These include sales of empty returnable and non-returnable containers to be filled and resold, containers the contents of which are exempt from the sales tax, and returnable containers when sold with the contents or resold for refilling.

Origin:  M.G.L. c. 64H, S. 6(q)
Estimate:  $166.9
 
 166.9
3.411 Exemption for Certain Sales by Typographers, Compositors, Color Separators
Sales by typographers, compositors or color separators of composed type, film positives and negatives and reproduction proofs, or transfers of such items to a printer, publisher, or manufacturer of folding boxes for use in printing, are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(gg)
Estimate:  N.A.
 
 N.A.
3.412 Exemption for Sales of Building Materials and Supplies to be Used in Connection with Certain Construction Contracts
Materials and supplies used in connection with construction contracts with the United States and the Commonwealth of Massachusetts, or any of its subdivisions are tax exempt where the construction is for public purposes. Materials and supplies used in connection with construction contracts with a tax-exempt organization are tax exempt where the construction is to be used exclusively in carrying out the organization's charitable purpose. The exemption includes rentals of equipment as well.

Origin:  M.G.L. c. 64H, S. 6(f)
Estimate:  $107.7
 
 107.7
3.417 Exemption for Commuter Boats
Vessels, materials, tools, repair and spare parts used exclusively to provide scheduled commuter passenger service are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(pp)
Estimate:  N.A.
 
 N.A.
3.418 Exemption for Fuels, Supplies and Repairs for Vessels Engaged in Interstate or Foreign Commerce
Fuels, supplies and repairs for vessels engaged in interstate or foreign commerce are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(o)
Estimate:  $0.7
 
 0.7
3.419 Exemption for Fuel Used in Operating Aircraft and Railroads
Fuel used in operating aircraft and railroads is exempt from sales tax.

Comment: At a community's option, kero-jet fuel may be subject to a local tax at of 5% of average price or $0.05 per gallon; whichever is higher.

Origin:  M.G.L. c. 64H, S. 6(j)
Estimate:  $59.3
 
 59.3
3.420 Exemption for Sales of Certain New or Used Buses
New and used buses that provide scheduled intra-city local service and are used by common carriers certified by the Department of Telecommunications and Energy are exempt from sales tax. The exemption includes replacement parts, materials and tools used to maintain or repair these buses.

Origin:  M.G.L. c. 64H, S. 6(aa)
Estimate:  N.A.
 
 N.A.
3.421 Exemption for Films
Motion picture films for commercial exhibition are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(m)
Estimate:  N.A.
 
 N.A.

 

Fiscal Year 2014 Resource Summary (in Millions)
TAX EXPENDITURE FY2012 FY2013 FY2014
Miscellaneous Exemptions 118.9 123.3 128.5

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item description amount
Miscellaneous Exemptions 128.5
3.601 Exemption for Casual or Isolated Sales
Casual or isolated sales (sales by private parties) are exempt from sales tax, except casual sales of motor vehicles, trailers, and boats. Sales of these listed items are exempt only when they are between family members.

Origin:  M.G.L. c. 64H, S. 6(c) and M.G.L. c. 64I, S. 7(b)
Estimate:  N.A.
 
 N.A.
3.602 Exemption for Vending Machine Sales
Vending machine sales of ten cents or less are exempt from sales tax. In addition, sales through vending machines, which exclusively sell snacks and candy with a sales price of less than one dollar, are exempt from the sales tax on meals.

Origin:  M.G.L. c. 64H, S. 6(h) and (t)
Estimate:  N.A.
 
 N.A.
3.603 Exemption for Certain Meals
Meals prepared by churches and hospitals, meals provided to organizations for the elderly, and meals provided by educational institutions are exempt from sales tax.

Comment: Estimate is for meals served in schools only.

Origin:  M.G.L. c. 64H, S. 6(cc)
Estimate:  $11.5
 
 11.5
3.604 Exemption for Certain Bed and Breakfast Establishments from Sales Tax on Meals and Room Occupancy Excise
Owner-occupied one-, two-, and three-bedroom bed and breakfast establishments are exempt from both the sales tax on meals and the room occupancy excise.

Origin:  M.G.L. c. 64G, S. 1, 2, 3,3A, and 6, and M.G.L. c. 64H, S. 6(h)
Estimate:  N.A.
 
 N.A.
3.605 Exemption for Certain Summer Camps from Sales Tax on Meals and Room Occupancy Excise
An exemption from both the sales tax on meals and the room occupancy excise is provided for summer camps for children age 18 and under, or for summer camps for developmentally disabled individuals. Camps that satisfy the above criteria but offer their facilities during the off-season to individuals 60 years of age or over for 30 days or less in any calendar year will not lose their exemption.

Comment: Estimate is for meals only.

Origin:  M.G.L. c. 64G, S. 2 and M.G.L. c. 64H, S. 6(cc)
Estimate:  $1.1
 
 1.1
3.606 Exemption for Trade-in Allowances for Motor Vehicles and Trailers
In most cases, motor vehicles and trailers bought in a trade-in transaction are only subject to sales tax on the excess of the purchase price over the amount credited for the trade-in.

Origin:  M.G.L c. 64H, S. 26, c. 64I, S. 27
Estimate:  $101.1
 
 101.1
3.607 Exemption for Publications of Tax-Exempt Organizations
The publications of tax-exempt organizations are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(m)
Estimate:  $14.8
 
 14.8
3.608 Exemption for Gifts of Scientific Equipment
Gifts of scientific equipment or apparatus by manufacturers to non-profit educational institutions or to the Massachusetts Technology Park Corporation are exempt from sales tax.

Origin:  M.G.L. c. 64H, S. 6(jj)
Estimate:  N.A.
 
 N.A.
3.609 Exemption for Vessels or Barges of 50 Tons or Over
Vessels or barges weighing 50 tons or more are exempt from sales tax when constructed in-state and sold by the builder.

Origin:  M.G.L. c. 64H, S. 6(o)
Estimate:  N.A.
 
 N.A.
3.610 Exemption for Rental Charges for Refuse Containers
Rental charges in connection with service contracts by and between waste service firms and customers for refuse containers or bins are exempt from sales tax when the containers are placed on the customer's premises by the waste service firm.

Origin:  M.G.L. c. 64H, S. 6(ii)
Estimate:  N.A.
 
 N.A.
3.611 Exemption for Honor Trays
Food items purchased from honor trays are exempt from sales and meals taxes, provided that no item on the honor tray is sold for $1 or more.

Comment: Honor trays are vending carts in workplaces from which snacks may be purchased on the honor system.

Origin:  M.G.L. c. 64H, S. 6(h)
Estimate:  N.A.
 
 N.A.

Key:

ORIGIN  
M.G.L. Massachusetts General Laws
ESTIMATES All estimates are in $ millions.

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