Massachusetts Sales Tax Rates

How to register for sales tax in Massachusetts

1. Online Registration (Preferred):

• This is the quickest and easiest method for new businesses.
• Go to the Massachusetts Department of Revenue (DOR) website: https://www.mass.gov/sales-and-use-tax-for-businesses
• Click on “Sales and Use Tax” and then “Register a New Business.”
• Follow the instructions to complete and submit the online application.
• You’ll need your business information (legal name, address, EIN/SSN) and start date.

2. Paper Registration (Alternative):

• Download the application form: ST-1 Application for a Sales Tax Permit: [invalid URL removed]
• Print, complete, and mail the application form to the DOR address provided on the form.
• Include any required documentation with your application.

3. Processing Time and Next Steps:

• Processing typically takes 10 business days for online applications and longer for mailed applications.
• The DOR will notify you by mail of your registration status and provide your Sales Tax Permit number.
• Once approved, you can begin collecting and reporting sales tax.

How to collect sales tax in Massachusetts

1. Determine the Tax Rate
2. Include Tax in Your Prices (Optional):

• You can choose to:
  • Display prices including tax
  • Display prices before tax and add the tax at checkout.

3. Point-of-Sale System (POS):

• If you have a POS system, program it with the correct Massachusetts sales tax rate(s) for your products/services.
• This automates the tax calculation and collection during sales.

4. Manual Calculation (Without POS):

• For manual sales, calculate the tax by multiplying the sales price by the tax rate
• Add the calculated tax amount to the sales price and collect the total amount from the customer.

5. Keep Records

• Maintain detailed records of your sales and the amount of sales tax collected for each transaction.
• This is crucial for filing your sales tax returns.

6. File and Pay Sales Tax

How to get a sales tax permit/license in Massachusetts?

Once your business is registered, apply for a sales tax permit through the Massachusetts Department of Revenue. This is done online via MassTaxConnect, where you’ll need to fill out the necessary forms and provide details about your business operations and sales.

When are Massachusetts’s sales tax returns due?

The due date for filing your Massachusetts sales tax returns depends on your total sales tax liability for a specific period:

• Over $5,000 per Quarter: If your total sales tax liability for a quarter is more than $5,000, you are required to file electronically monthly.
• $5,000 or Less per Quarter: If your total sales tax liability for a quarter is $5,000 or less, you can file electronically quarterly.

The filing deadline is generally the 20th day of the month following the end of the filing period.

Is anyone exempt from sales tax in Massachusetts?

Yes, there are certain people and organizations exempt from paying sales tax on their purchases in Massachusetts. Here’s a breakdown:

• Non-Profits and Qualifying Organizations:
  • Non-profit charitable, educational, and religious organizations can obtain a sales tax exemption certificate from the Massachusetts Department of Revenue (DOR). This allows them to purchase specific goods tax-free (e.g., materials used for their exempt activities).
  • Examples include volunteer fire departments, veteran organizations, and some public libraries.
• Government Agencies: All levels of government (federal, state, and local) are exempt from paying sales tax on their purchases.
• Certain Sales:
  • Prepared food purchased from grocery stores: This includes most groceries but excludes prepared meals (taxable) and restaurant takeout (taxable).
  • Prescription drugs and medical devices
  • Gasoline: Subject to a separate gas tax (23 cents per gallon)
  • Clothing costing less than $175: There’s no tax on the first $175 of a single clothing item.

Do I Have to Collect Sales Tax from Massachusetts Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?

No.

Massachusetts has a marketplace facilitator law, which means that marketplaces like Walmart or Amazon should collect sales tax on behalf of 3rd party online sellers on their platforms.

But if you have a sales tax nexus in Massachusetts, remember you still need to collect sales tax on your other non-marketplace Massachusetts sales.