Ace Heating Service, Inc. v. State Tax Commission
| Decision Date | 28 October 1976 |
| Citation | 356 N.E.2d 698,371 Mass. 254 |
| Parties | ACE HEATING SERVICE, INC., et al. 1 v. STATE TAX COMMISSION. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Irving Marmer, Boston, for taxpayers.
Thomas H. Miller, Asst. Atty. Gen., for State Tax Comn.
Before HENNESSEY, C.J., and REARDON, BRAUCHER, KAPLAN and WILKINS, JJ.
Two taxpayers seek abatements of sales and use taxes, claiming exemptions under G.L. c. 64H, § 6(r) and (s), originally enacted temporarily by St.1966, c. 14, § 1, continued by St.1967, c. 757, § 1, and subsequently amended by St.1971, c. 555, § 45. The taxpayers are heating contractors; in the performance of lump-sum contracts they sell, install and service hot water and steam generating boilers and related equipment, materials and supplies. The State Tax Commission (commission) and the Appellate Tax Board (board) denied the abatements sought, applying the commission's Emergency Reg. No. 12, published July 7, 1966. We affirm.
It is common ground that the taxpayers, in the performance of lump-sum contracts, purchased machinery, materials and supplies for which they did not pay a sales tax to the suppliers nor a use tax to the Commonwealth. The board found that the property in question was purchased not for resale but for use in producing a finished product. Accordingly, the board ruled that the sales to the taxpayers were 'sales at retail' within the meaning of G.L. c. 64H, §§ 1(13) and 2. That ruling is not contested. The sole issue is whether the sales in question were exempt under § 6(r) and (s), made applicable to use taxes by G.L. c. 64I, § 7(b). The taxes in question were for various periods from April, 1966, through February, 1973. By stipulation the cases were tried on the basis of sample months.
Under § 6(r) sales of 'materials, tools and fuel' are exempt if they 'become an ingredient or component part of tangible personal property to be sold' or if they are 'consumed and used directly and exclusively . . . in an industrial plant in the (process of the) actual manufacture of tangible personal property to be sold, . . .; in the furnishing of power to an industrial manufacturing plant; or in the furnishing of gas, water, steam or electricity when delivered to consumers through mains, lines or pipes.' Under § 6(s) sales of 'machinery, or replacement parts thereof,' are exempt if the property is 'used directly and exclusively . . . in an industrial plant in the actual manufacture, conversion or processing of tangible personal property to be sold, . . .; in the furnishing of power to an industrial manufacturing plant; or in the furnishing of gas, water, steam or electricity when delivered to consumers through mains, lines or pipes.' Language in brackets was deleted by St.1971, c. 555, § 45; language in italics was inserted by the same statute. We have treated 'manufacture' in § 6(r) as equivalent to 'manufacture, conversion or processing' in § 6(s). Rowe Contracting Co. v. State Tax Comm'n, 361 Mass. 158, 162, 279 N.E.2d 675 (1972).
We have recognized that the scope of these exemptions is somewhat uncertain. Wakefield Ready-Mixed Concrete Co. v. State Tax Comm'n, 356 Mass. 8, 10, 247 N.E.2d 869 (1969). There is no requirement that this type of exemption be interpreted narrowly. Id. at 12, 247 N.E.2d 869. Courier Citizen Co. v. Commissioner of Corps. & Taxation, 358 Mass. 563, 569, 266 N.E.2d 284 (1971). But where the language of a statute is vague or permits more than one reasonable interpretation, contemporary administrative construction, especially if long continued, is of significance. Assessors of Holyoke v. State Tax Comm'n, 355 Mass. 223, 243--244, 244 N.E.2d 287 (1969). Moreover, G.L. c. 64H, § 8(a), inserted by St.1967, c. 757, § 1, provides in part, 'It shall be presumed that all gross receipts of a vendor from the sale of tangible personal property are from sales subject to tax until the contrary is established.' Cf. G.L. c. 64I, § 8(a).
Contrary to the taxpayers' contention, we do not think the property in question constitutes materials, tools or fuel, or substitutes therefor, subject to § 6(r). The boilders and related materials are 'machinery' within § 6(s), but they are not used 'directly' in the actual manufacture of tangible personal property to be sold. The taxpayers sell, install and service boilers; they do not sell hot water or steam or goods manfuactured through the use of hot water or steam. Nor do they 'directly' furnish power to manufacturers or hot water or steam to either manufacturers or consumers.
To the extent...
To continue reading
Request your trial
-
Xtra, Inc. v. Commissioner of Revenue
...Co. v. Massachusetts Comm'n Against Discrimination, --- Mass. ---, --- a, 375 N.E.2d 1192 (1978), and Ace Heating Serv., Inc. v. State Tax Comm'n, 371 Mass. 254, 256, 356 N.E.2d 698 (1976). The Commissioner contends that special weight should be given her interpretation in this case because......
-
Henry Perkins Co. v. Board of Assessors of Bridgewater
...v. Lindley, 54 Ohio St.2d 351, 376 N.E.2d 1341 (1978). See generally Annot., 65 A.L.R.3d 434 (1975).5 See Ace Heating Serv., Inc. v. State Tax Comm'n, 371 Mass. ---, --- (Mass.Adv.Sh. (1976) 2490, 2492), 356 N.E. 698 (1976).6 See Mahony v. Assessors of Watertown, 362 Mass. 210, 214, 285 N.E......
-
City of Springfield v. Board of Assessors of Granville
...in the 1928 statute. 1934 Senate Doc. No. 35. As to the effect of such practical construction, see Ace Heating Serv., Inc. v. State Tax Comm'n, 371 Mass. 254, ---, 356 N.E.2d 698 (1976). 3. Constitutionality. The assessors now argue that the arbitrary valuation in the 1928 statute and the e......
-
S. J. Groves & Sons Co. v. State Tax Commission
...lines or pipes' are disposed of by our recent decision in Ace Heating Serv. Inc. v. State Tax Comm'n, --- Mass. ---, --- ---, b 356 N.E.2d 698 (1976). We there held that those exemptions do not apply to sales to contractors who do not furnish water to 5. Disposition. Our discussion makes cl......