Sales to exempt organizations:
Sales to organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code (such as charitable and nonprofit organizations), as well as sales to agents of Section 501(c)(3) organizations, generally are exempt. To obtain the exemption, the purchaser, or its agent, must provide the vendor with a signed copy of a Sales Tax Exempt Purchaser Certificate ( Form ST-5 ) or Contractor's Sales Tax Exempt Purchase Certificate ( Form ST-5C ) and a copy of the organization's Certificate of Exemption (Form ST-2) issued by DOR. The vendor must ensure that this form is complete and retain it to prove the sale was exempt. Otherwise, the sales tax may be assessed against the vendor.
Sales to government agencies:
Sales made directly to federal and Massachusetts state or municipal government agencies or entities are exempt. To qualify, the agency must be a regular department of government or an entity wholly owned by the government that performs governmental duties on an exclusive basis.
Additionally, sales of tangible personal property, including meals, to agents of governmental entities, are exempt, provided certain requirements are met. See TIR 99-4, Sales and Use Tax Exemptions: Agents of Exempt Entities, and Regulation 830 CMR 64H.6.5 , Sales Tax on Meals, for rules for substantiating exempt purchases.
Please note: Because of the complexity of the law, some guidelines listed here may not apply to every transaction. To avoid any interest or penalty charges on tax that was not collected properly, taxpayers with questions about the taxability of any sale should call DOR's Customer Service Bureau at 617-887-MDOR or toll-free in Massachusetts at 800-392-6089 or request a letter ruling by writing to: Department of Revenue, Rulings and Regulations Bureau, PO Box 9566, Boston, MA 02114-9566.
Directive 92-3: Massachusetts Sales and Use Tax Exemptions for certain Sales and Use of Gas, Steam, Electricity and Fuel
