How To Register For Sales Tax In Massachusetts
Okay, so you have nexus! Now what?
The next crucial step in complying with Massachusetts sales tax is to register for a sales tax permit. Itâs actually illegal to collect tax without a permit. So to get all your ducks in a row, start with tax registration first.
You can find directions about how to register in Massachusetts on their Department of Revenue website.
When registering for sales tax, you should have at least the following information at hand:
- Your personal contact info
- Social security number or Employer Identification Number
- Business entity
- Bank account info where youâll deposit the collected sales tax
When Sales Tax Is Exempt In Massachusetts
If a vehicle is transferred to and from a business entity, then there is no sales tax. Vehicles that are transferred by a contest, drawing, or raffle are exempt.
Also, if the vehicle is given as a gift, then the sales tax can be waived.
If you are disabled and have suffered a loss in both legs, both arms, or 1 leg and 1 arm, then you do not have to pay the sales tax.
Springfield Massachusetts Sales Tax Rate
springfield Tax jurisdiction breakdown for 2022
What does this sales tax rate breakdown mean?
Sales tax rates are determined by exact street address. The jurisdiction-specific rates shown add up to your minimum combined sales tax rate. The total rate for your specific address could be more.
Need the exact sales tax rate for your address?
What is the sales tax rate in Springfield, Massachusetts?
The minimum combined 2022 sales tax rate for Springfield, Massachusetts is . This is the total of state, county and city sales tax rates. The Massachusetts sales tax rate is currently %. The County sales tax rate is %. The Springfield sales tax rate is %.
Did South Dakota v. Wayfair, Inc affect Massachusetts?
The 2018 United States Supreme Court decision in South Dakota v. Wayfair, Inc. has impacted many state nexus laws and sales tax collection requirements. To review the rules in Massachusetts, visit our state-by-state guide.
Did COVID-19 impact sales tax filing due dates in Springfield?
The outbreak of COVID-19 may have impacted sales tax filing due dates in Springfield. Please consult your local tax authority for specific details. For more information, visit our ongoing coverage of the virus and its impact on sales tax compliance.
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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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Cambridge Massachusetts Sales Tax Rate
cambridge Tax jurisdiction breakdown for 2022
What does this sales tax rate breakdown mean?
Sales tax rates are determined by exact street address. The jurisdiction-specific rates shown add up to your minimum combined sales tax rate. The total rate for your specific address could be more.
Need the exact sales tax rate for your address?
What is the sales tax rate in Cambridge, Massachusetts?
The minimum combined 2022 sales tax rate for Cambridge, Massachusetts is . This is the total of state, county and city sales tax rates. The Massachusetts sales tax rate is currently %. The County sales tax rate is %. The Cambridge sales tax rate is %.
Did South Dakota v. Wayfair, Inc affect Massachusetts?
The 2018 United States Supreme Court decision in South Dakota v. Wayfair, Inc. has impacted many state nexus laws and sales tax collection requirements. To review the rules in Massachusetts, visit our state-by-state guide.
Did COVID-19 impact sales tax filing due dates in Cambridge?
The outbreak of COVID-19 may have impacted sales tax filing due dates in Cambridge. Please consult your local tax authority for specific details. For more information, visit our ongoing coverage of the virus and its impact on sales tax compliance.
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If I Am A Foreign Entity How Do I Register As A Remote Retailer Or Marketplace Facilitator
If you are a foreign entity that has been issued a Federal Tax Identification Number by the Internal Revenue Service , please register online using MassTaxConnect. If you are not eligible or required to obtain a Federal Tax Identification Number, please contact us at for assistance with registration.
Is The Massachusetts Sales Tax Destination
Massachusetts is a destination-based sales tax state, which meansthat sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Massachusetts from a Massachusetts vendor, the vendor must collect a sales tax rate applicable at the buyer’s address . This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.
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General Rules And Due Dates
If you’re a buyer, transferee, or user, who has title to or has a motor vehicle or trailer, you’re responsible for paying sales or use tax.
Motor vehicle or trailer sales or use tax is due by the 20th day of the month following the purchase, use, storage, or any other consumption within Massachusetts.
If the sales or use tax is not paid on time, the buyer will have to pay interest and penalties.
The sales tax applies to transfers of title or possession through retail sales by registered dealers or lessors while doing business. If the sale is made by a motor vehicle or trailer dealer or lessor who is registered, the sales tax rate is 6.25%.
The use tax applies to all other types of transfers of title or possession where the vehicle transferred is stored, used, or consumed in Massachusetts.
If a motor vehicle is casually sold , the use tax rate is 6.25% of the greater of:
- The actual sales price for the vehicle, or
- The motor vehicle’s clean trade-in value
- Note: For trailers, you are taxed on the actual sales price. Book value rules do not apply.
If you purchase a motor vehicle or trailer outside of Massachusetts and bring it into Massachusetts within 6 months for permanent use, a use tax is due by the 20th day of the following month when the vehicle entered Massachusetts.
For example, if you purchased a motor vehicle in New Hampshire on January 1st and brought it into Massachusetts on June 30th, a use tax would be due by July 20th.
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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What Is Exempt From Sales Taxes In Massachusetts
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here’s how Massachusetts taxes five types of commonly-exempted goods:
Clothing
OTC Drugs
For more details on what types of goods are specifically exempt from the Massachusetts sales tax see Massachusetts sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Massachusetts? Taxation of vehicle purchases in particular are discussed in the page about Massachusetts’ sales tax on cars.
Contest A Massachusetts Jeopardy Assessment
Massachusetts may issue a Notice of Jeopardy Determination in certain situations. Thejeopardy assessment gives Massachusetts Department of Revenue accelerated rights and it may immediately begin to try and collect. Due to the jeopardy nature, the taxpayer only has20 days to contest the assessment and must place a security deposit to fight the issue.
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Do Marketplace Rules Apply To Facilitated Sales Of Software Including Software Subscriptions
Yes. Sales of software, including desktop and mobile apps, are subject to tax as sales of tangible personal property. Businesses that facilitate the sale of software are required to register as a marketplace, and collect and remit tax on these sales. This requirement applies also to businesses that facilitate the sale of subscriptions to use software.
Versions Of The Proposal
Jon B. Hurst, President of the Retailers Association of Massachusetts, filed two versions of the initiative. Both versions of the initiative were designed to provide for a weekend in August of each year without a state sales tax on retail for non-business customers. Version 17-19 was designed to decrease the state sales tax from 6.25 percent to 4.5 percent. Version 17-21 was designed to decrease the state sales tax from 6.25 percent to 5 percent. The proponents decided to proceed with signature gathering for Version 17-21, abandoning Version 17-19.
The petition summary for the abandoned Version 17-19 is below:
The full text of initiative Version 17-19 is available here.
The group backing this initiative also filed initiatives designed to decrease the sales tax in the state but not add the tax-free weekend provision. Petitioners decided to move forward with the version that includes the tax-free weekend.
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I Received A Massachusetts Sales And Use Tax Audit Notice What Should I Do
Massachusetts regularly audits businesses that are required to charge, collect, and remit various taxes in the state. Businesses that receive sales and use tax audit notice should consider the following:
- Unless you have experience handling Massachusetts sales and use tax audits, how can you trust that the states auditor is abiding by the rules and following proper procedure?
- How will you know when to provide documents or when to push back?
- Do you have a thorough understanding of your sales and use tax areas of exposure?
- Controlling the audit is paramount to the limiting exposure and shaping the results. Are you confident in doing that on your own?
If you are unsure of the answer to these questions and you do not have experience handling Massachusetts sales tax audits, hiring a professional might be right for you.Contact us and learn how our sales tax professionals can give you the peace-of-mind and confidence you need during your audit.
Please visit our resource pages for more detailed information and to help you evaluate critical decisions during your Massachusetts sales and use tax audit.
Filing & Paying Sales Tax On Meals
Requirements
Vendors collecting and sending sales tax on meals must file monthly returns. Returns are due on or before the 30th day following the month represented by the return. For more information, visit New Due Date for Sales and Use Tax Returns.
You must file a return for all periods, even when no tax is due – just enter 0 in the appropriate places.
Effective for returns for tax periods beginning on or after January 1, 2022, and any late-filed returns for earlier periods, you must file sales tax on meals returns and make payments electronically.
Advance payment requirements for Meals tax
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Grand Bargain Compromise Deal
On June 28, 2018, legislation was passed in the legislature and signed by the governor 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, both backed by Raise Up Massachusetts, and a Sales Tax Decrease and Tax-Free Weekend initiative backed by the Retailers Association of Massachusetts.
The three initiatives were approved by the legislature since the Democratic-controlled Massachusetts Legislature passed and Republican Governor Charlie Baker signed a compromise bill known as the “grand bargain.” The bill, House Bill 4640 , was passed in the Massachusetts House of Representatives on June 20, 2018, in a vote of 126 to 25. It was passed in the Massachusetts State Senate in a vote of 30 to 8, with two vacancies in the chamber. Of the eight no votes in the Senate, six of them came from Democratic senators and two came from Republican senators. Of the seven Republican senators in the Massachusetts Senate, all voted yes except Donald Humason Jr. and Ryan Fattman .
Compromise negotiations
At the request of legislative leadership and Governor Charlie Baker, Raise Up Massachusetts entered negotiations on the two other measures they were backing: the $15 minimum wage initiative and the Income Tax for Education and Transportation Initiative, , and with the Retailers Association concerning the sales tax decrease initiative.
How Does A Remote Seller Or Marketplace Determine If It Must Begin Collecting And Remitting Tax For A Calendar Year Beginning On Or After January 1 2020
The remote seller or marketplace must total its Massachusetts sales from the preceding calendar year. If those Massachusetts sales exceeded $100,000 prior to November 1 of that preceding year, the seller or marketplace is required to begin collection and remittance as of January 1. If those Massachusetts sales exceeded $100,000 after November 1of that year, the seller or marketplace is required to begin collection and remittance as of the 1st day of the 1st month beginning two months after the month in which the $100,000 threshold was exceeded.
A remote seller or marketplace must also keep track of its Massachusetts sales during the current calendar year. If those Massachusetts sales exceed $100,000 during the calendar year, the seller or marketplace is required to begin collection and remittance as of the 1stday of the 1stmonth beginning two months after the month in which the $100,000 threshold was exceeded.
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What Transactions Are Generally Subject To Sales Tax In Massachusetts
In the state of Massachusetts, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. Several examples of exceptions to this tax are most food and grocery products, certain sanitation and health care items, periodicals, clothes which cost less than one hundred and seventy five dollars, and medical devices which have been prescribed.This means that someone selling textbooks and school supplies would be required to charge sales tax, but an individual who sells coffee and hot chocolate would not be required to charge sales tax on most of their products.
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 .
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Motor Vehicle And Trailer Sales And Use Tax
Massachusetts has a sales and use tax on buying or transferring motor vehicles or trailers. This guide provides general information about Massachusetts tax laws and Department of Revenue policies and procedures. It is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts General Laws, Massachusetts Department of Revenue Regulations, Department rulings or any other sources of the law.Updated: September 15, 2022
What Information Must A Marketplace Communicate To A Marketplace Seller
A marketplace that is required to collect tax on its facilitated sales must inform the marketplace sellers that sell through the marketplace of this collection requirement before it begins collecting the tax. For purposes of communicating this information, the marketplace must provide or otherwise reasonably make available to these sellers a marketplace facilitator collection certificate stating that it will collect and remit tax on behalf of the sellers as of a certain date. Marketplaces will receive this marketplace facilitator collection certificate, Form ST-16, from DOR after registering as a marketplace.
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