What Is Massachusetts Sales Tax

Nexus Regulations In Massachusetts

You only have to collect sales tax on purchases made by Massachusetts customers if you have a nexus, or significant presence, in the state. Massachusetts outlines conditions that can trigger a nexus for your company, including:

• Having a business location in the state
• Selling, renting, or leasing tangible personal property or certain telecommunications services in the state
• Having representatives soliciting orders for tangible personal property or telecommunications services in the state
• Selling to Massachusetts residents or businesses, and performing delivery, repair, or installation services in connection with those sales

There is an Amazon fulfillment center in Massachusetts, and that can create a nexus for sellers who use fulfillment by Amazon to complete their orders.

Massachusetts implemented a series of economic nexus laws that went into effect on October 1, 2019. Remote sellers are required to collect and remit sales taxes if they exceed $100,000 in revenue within Massachusetts in a calendar year. Before this date, the threshold was $500,000.

Massachusetts Sales Tax Rates By City

The state sales tax rate in Massachusetts is 6.250%. There are no local taxes beyond the state rate.

Select the Massachusetts city from the list of popular cities below to see its current sales tax rate.

Sales tax data for Massachusetts was collected from here. Sale-Tax.com strives to have the most accurate tax percentages available but tax rates are subject to change at any time. Always consult your local government tax offices for the latest official city, county, and state tax rates. Help us make this site better by reporting errors.

Heres What You Should Know About The Sales Tax In Massachusetts

A sales tax which is a substitute for VAT, is a tax that allows for business deductions and falls on the final purchaser. A seller of a good or a service charges the sales tax and is responsible for paying it to the responsible tax authority. In Massachusetts, such an authority is the Massachusetts Department of Revenue it administers the sales tax for Massachusetts and oversees the registration and compliance of the taxpayers. Keep in mind that in some instances, even remote sellers must become registered collectors of the sales tax Massachusetts.

To learn if a company has to collect the proper Massachusetts sales tax rates, one must determine if a nexus or a strong tie with the state is formed. As soon as such a tie is established, a company must register and add the sales tax to their prices.

Unlike many other states, Massachusetts only has a fixed Massachusetts sales tax rate and no local rates that typically make accounting for the sales tax more complex. In addition, some items in the state are exempt from the Massachusetts state sales tax. Therefore, you should check if your economic activity is taxable before starting operations. Keep in mind that payers of both sales and use tax Massachusetts have to stick to tax filing deadlines assigned by MassDOR.

Should my company register for Massachusetts sales tax ?

Here are the essential legal criteria that signal that you must become a taxpayer in Massachusetts:

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File Your Sales Tax Return

Now that youve registered for your Massachusetts seller’s permit and know how to charge the right amount of sales tax to all of your customers, you are all set to file your sales tax return. Just be sure to keep up with all filing deadlines to avoid penalties and fines.

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Are Services Subject To Sales Tax In Massachusetts

In the state of Massachusetts, services are not usually taxable. While most services are exempt, there are a few exceptions. For example, a service who’s work includes creating or manufacturing a product is very likely considered to be taxable, and thus you would most likely have to pay sales tax on the service.

You can find a table describing the taxability of common types of services later on this page.

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Solar Wind And Energy Tax Credit

Massachusetts full-year and part-year residents who have a principal residence within the state may qualify for the Solar, Wind and Energy Tax Credit. The credit is only for solar and wind energy sources. You can claim the smaller of 15% of the net expenditure for the renewable energy source property or up to $1,000.

This credit isnât refundable, but if the credit is more than you owe, you can carry the excess forward for up to three years.

Massachusetts’ Sales Tax By The Numbers:

Massachusetts has ahigher-than-average state sales tax rate, but the actual sales tax rates in most Massachusetts cities are lower than averagewhen local sales taxes from Massachusetts’s 229 local tax jurisdictions are taken into account.

Rankings by Average State + Local Sales Tax:

Ranked 33rd highest by combined state + local sales tax

Ranked 38th highest by per capita revenue from state + local sales taxes

Rankings by State Sales Tax Only:

Ranked 7th highest by state sales tax rate

Ranked 26th highest by per capita revenue from the statewide sales tax

Massachusetts has a statewide sales tax rate of 6.25%, which has been in place since 1966.

Municipal governments in Massachusetts are also allowed to collect a local-option sales tax that ranges from 0% to 0% across the state, with an average local tax of N/A .The maximum local tax rate allowed by Massachusetts law is < span class=’text-muted’> N/A< /span> .You can lookup Massachusetts city and county sales tax rates here.

This page provides an overview of the sales tax rates and laws in Massachusetts. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Massachusetts Sales Tax Handbook’s Table of Contents above.

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Massachusetts Sales Tax Audit Process

TheMassachusetts Department of Revenue usually engages in two main types of audit: A Desk Audit or a Field Audit. A desk audit is an audit performed by an auditor, at a desk , by comparing data the MA DOR already has or reviewing a specific transaction or transactions. In short, there usually is a discrete purpose for receiving a desk audit notice. During a desk audit, the Business can expect:

• A notice stating the nature of the issue
• Ask the taxpayer why it disagrees with the notice
• Provide a deadline upon which the response is due

Afield audit, however, is a more in depth review by a MA DOR auditor, in which the auditor reviews the books and records of the taxpayer and often visits the location. This type of audit is more general in nature. During a field audit, the Department will:

• Describe records they want to complete the audit
• Explain the audit plan and procedures
• Provide the business with the Massachusetts Taxpayer Bill of Rights
• Determine records to be reviewed

A field audit will follow the general timeline described below:

What to Expect After You Receive a Massachusetts Sales and Use Tax Audit Notice

What to Expect from A Massachusetts Sales Tax Auditor

• Auditor will conduct pre audit research.
• Auditor will often schedule and perform an entrance conference.
• Records will be requested .

What to Expect During the Audit

Once the necessary records are received, the auditor will:

After the Audit Understand and Defend Your Businesses Rights

Final Assessment

When To File Taxes In Massachusetts

When you register for sales tax, Massachusetts will assign you a certain filing frequency. Youâll be asked to file and pay sales tax either monthly, quarterly, or annually.

Usually the frequency they choose is based on the amount of sales tax you collect from buyers in Massachusetts. High-revenue businesses file more frequently than lower volume businesses, for example.

Massachusetts sales tax returns are due on the 20th day of the month following the reporting period. If the due date falls on a weekend or holiday, then your sales tax filing is generally due the next business day.

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What Are Vendors Responsibilities

Any farm business selling taxable items should display their ST-1 certificate in a location where customers can easily see it. Sales tax must be separately stated and charged on all receipts or bills, collected from customers at the time of purchase, and then sent by the farm to the DOR on time and with the appropriate Massachusetts sales tax return. In the case of regular sales tax, Form ST-9 must be filed on an annual, quarterly, or monthly basis . In the case of sales tax on meals, Form ST-MAB-4 must be filed on a monthly basis. Records providing evidence of each transaction must be kept for at least three years.

How Much Is The Sales Tax In Massachusetts

If you are a remote seller and wonder whats the sales tax in Massachusetts you should add, keep in mind that Massachusetts sales tax is destination-based, meaning that you should always include the sales tax based on the address of your recipient.

However, the general Massachusetts state sales tax rate is 6.25 %. There are no local or municipalities sales tax rates Massachusetts. Please be reminded that the best way to have the latest information on how much is the sales tax in Massachusetts is by using our Sales Tax Calculator or contacting our team.

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Collecting Sales Tax On Farm Products

This page gives an overview of how to collect sales tax on farm products sold at farm stores or farmers markets in Massachusetts. Note that sales tax laws are different in each state. This guide is designed to help farmers ensure that they are adhering to applicable laws, but it is not a legal document and is not exhaustive for more detailed information on collecting sales tax in Massachusetts, see this guide to sales and use tax.

Massachusetts Sales Tax Decrease And Tax

The Massachusetts Sales Tax Decrease and Tax-Free Weekend Initiative was not on the ballot in Massachusetts as an indirect initiated state statute on . It was approved by the legislature on June 28, 2018.

The initiative was designed to decrease the state sales tax from 6.25 percent to 5 percent and establish a weekend in August of each year as a break from all retail sales taxes.

On June 28, 2018, Republican Governor Charlie Baker signed a bill that was passed in the Democratic-controlled Massachusetts Legislature as part of a compromise with ballot initiative proponents of three measures: a $15 per hour minimum wage initiative and an initiative to establish a paid sick and family leave program funded by a payroll tax backed by Raise Up Massachusetts, and a Sales Tax Decrease and Tax-Free Weekend initiative backed by the Retailers Association of Massachusetts.

Raise Up Massachusetts and the Retailers Association of Massachusetts had agreed not to submit signatures for their proposed initiatives since the bill had been signed. To read more about the compromise, .

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Deducting Massachusetts Income Taxes

If you pay Massachusetts income tax, the IRS allows you to claim a deduction on your federal tax return for them. You can claim a state income tax deduction if you itemize deductions on your federal return.

To determine if you should itemize your deductions, add up your calendar-year deductible expenses, including your state income tax expense, to see if the total is greater than the standard deduction amount for your filing status. If you are single you can claim a standard deduction of $12,400. So, if you pay more than $12,400 in state income taxes and other itemized deductions, then consider itemizing your taxes.

Due to the Tax Cuts and Jobs Act, state and local tax deductions, including state income taxes, are limited to $10,000 per year .

Property Taxes And Property Tax Rates

Property tax rates are determined at the local level. That said, Massachusetts offers a few exemptions for the following groups:

• Up to $500 for legally blind taxpayers
• Qualifying senior citizens: Up to $1,000 or 20% of the average assessed valuation of residential property in your city or town
• $175 for qualifying seniors, surviving spouses, and minor children of a deceased parent
• Up to full exemption for qualifying Veterans
• Full exemption for qualifying religious and charitable organizations

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Are Shipping & Handling Subject To Sales Tax In Massachusetts

In the state of Massachusetts, the laws regarding tax on shipping and handling are relatively simple. Essentially, if the item being shipped to the buyer is considered taxable, then the shipping cost is usually considered to be taxable as well, and if the item being shipped is not taxable, then the shipping cost is not considered taxable either. In addition, taxes can also be excluded if the tax is set in good faith to be reasonably similar to the costs of getting the purchased product prepared and delivered to their destination, and if the taxes are separately stated from the cost of the product itself on the invoice.

How Often Should You File

How often you need to file depends upon the total amount of sales tax your business collects.

• Annual filing: If your business collects less than $8.33 in sales tax per month then your business should elect to file returns on an annual basis.
• Quarterly filing: If your business collects between $8.33 and $100 in sales tax per month then your business should elect to file returns on a quarterly basis.
• Monthly filing: If your business collects more than $100 in sales tax per month then your business should file returns on a monthly basis.

Note: Massachusetts requires you to file a sales tax return even if you have no sales tax to report.

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When Will I Get My Mass Tax Rebate

Individuals eligible for a refund will receive it automatically as a check sent through the mail or by direct deposit. The distribution of refunds began on Tuesday, Nov. 1.

Approximately 500,000 refunds were expected to be distributed during the first week. About 1 million refunds were scheduled to be distributed weekly thereafter until all eligible refunds have been distributed.

Refunds will not go out in a particular predictable order, so if you haven’t received yours yet, don’t worry. Eligible taxpayers who have already filed their 2021 tax return and had a tax liability will automatically receive their refund by mid-December.

Direct deposits will be labeled “MASTTAXRFD,” and refunds mailed as checks will include several sentences on the check explaining Chapter 62F and why the recipient is receiving the refund.

The Baker administration also set up a website, www.mass.gov/62frefunds, where you can get a preliminary estimate of your refund. A call center is also now available at 877-677-9727 to answer questions about the Chapter 62F taxpayer refunds. It is open Monday through Friday, from 9 a.m. to 4 p.m.

What Are Massachusetts Sales

Massachusetts sales include all of a sellers sales of tangible personal property or services delivered into the state, including sales exempt from tax. In the case of a marketplace, the computation includes the Massachusetts sales that are facilitated by the marketplace and the direct Massachusetts sales made by the marketplace .

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Do I Have To Pay Income Tax In Massachusetts

Full-year and part-year residents who made at least $8,000 in annual Massachusetts gross income must file a tax return, regardless of their filing status.

If youâre a nonresident with an annual gross income of more than either $8,000 or the prorated personal exemption , youâre required to file taxes in Massachusetts. Your prorated tax exemption is your personal exemption adjusted for your percentage of your Massachusetts income compared to your total gross income from all sources.

Massachusetts Sales Made Through Marketplace Providers

If your business sells on Amazon or a similar marketplace provider, you may not have to collect sales and use tax on those sales. Specifically, if the marketplace provider certifies they are collecting and reporting sales tax, you are off the hook. However, such sales may count towards your total sales threshold, potentially requiring your business to collect tax on sales made directly through your website or other marketplaces.

For more information, see

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Settling A Massachusetts Sales Tax Liability

Along the way, or even after one the critical notices are issued, there is the possibility tosettle your Massachusetts sales tax case by negotiating with the Massachusetts Department of Revenue. Often, you can get better results here than with the auditor. If you or your professional seldom does state and local tax work, it might be difficult to evaluate fair versus unreasonable settlements. DO NOT try to negotiate a settlement without an experienced Massachusetts state and local tax lawyer or other professional.

Boat Recreation & Snow Vehicles

MassTaxConnect is the recommended method to file and pay Form ST-6. You may also print and fill out a Form ST-6, and mail with payment to Mass. DOR – Trustee Tax Bureau, Contact Center – 200 Arlington St. 4th Floor – Chelsea, MA 02150.

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