How to handle Massachusetts clothing sales tax in your online store

by TaxJar May 10, 2021

If you happen to be lucky enough to travel around the country buying clothes, you might notice a strange trend. In some states, clothing is taxable just like any other item. In other states, clothing isn’t taxable at all or is taxable at a lower rate than other products. And in still other states, some of your clothing will be taxable and some won’t. Massachusetts is one of the latter states. So what on earth is up with that?

Massachusetts clothing sales tax, explained

In Massachusetts, all clothing and footwear items at $175 or less are exempt from sales tax.

Items above $175 are taxable at the statewide Massachusetts rate of 6.25%. But that’s where things can get a little tricky for online sellers. Only the price of the item beyond the non-taxable $175 is taxable.

Massachusetts clothing taxability example:

You buy a pair of jeans priced at $200. (I hope those are really nice jeans!) The first $175 in that price isn’t taxable, so you would only pay the Massachusetts sales tax rate of 6.25% on the remainder of the jeans’ price. In this case, you’d only pay tax on $25. In the final tally, you would only pay $1.56 in sales tax on your $200 fancy jeans in Massachusetts.

If you were in another state that considered clothing fully taxable, you would have paid something like $12.00 in tax on that same pair of jeans. (All depending on the tax rate at your location.)

Important to note: Massachusetts deems that some clothing designed specifically for protective or athletic use is taxable even if it’s priced at $175 or below. So if you sell sports gear or safety gear, you may want to check with the Massachusetts Department of Revenue before you set your product tax rates.

Calculating Massachusetts clothing sales tax in your e-commerce store

That’s all well and good, but this $175 threshold can make collecting sales tax a little tricky in your online store. That’s where TaxJar’s API comes to the rescue.

The TaxJar API allow you to assign a product tax code to the products you sell. If you assign the product tax code for clothing (which is 20010) to the clothing items you sell, the TaxJar API automatically charges your customer in any state the right amount of sales tax – whether the item you are selling is $1 or $1,000.

TaxJar API sales tax example:

Let’s say you are selling a pair of sneakers for $185 + shipping from your online store to someone in Massachusetts. No need to worry about calculating the right amount of sales tax. Simply pass in a value of 20010 in the product_tax_code parameter of a line_item, and we’ll do the work for you.

Here’s what a request looks like:

{
    "to_state": "MA",
    "to_zip": "02108",
    "line_items": [
        {
            "quantity": 1,
            "unit_price": 185.00,
            "product_tax_code": "20010"
        }
    ],
    "shipping": 5.25,
    "nexus_addresses": [
        {
            "country": "US",
            "state": "MA",
            "zip": "02180"
        }
    ]
}

And here’s the response:

{
    "tax": {
        "order_total_amount": 190.25,
        "shipping": 5.25,
        "taxable_amount": 10,
        "amount_to_collect": 0.63,
        "rate": 0.0625,
        "has_nexus": true,
        "freight_taxable": false,
        "tax_source": "destination",
        "breakdown": {
            "taxable_amount": 10,
            "tax_collectable": 0.63,
            "combined_tax_rate": 0.0625,
            "state_taxable_amount": 10,
            "state_tax_rate": 0.0625,
            "state_tax_collectable": 0.63,
            "county_taxable_amount": 0,
            "county_tax_rate": 0,
            "county_tax_collectable": 0,
            "city_taxable_amount": 0,
            "city_tax_rate": 0,
            "city_tax_collectable": 0,
            "special_district_taxable_amount": 0,
            "special_tax_rate": 0,
            "special_district_tax_collectable": 0,
            "line_items": [
                {
                    "id": "1",
                    "taxable_amount": 10,
                    "tax_collectable": 0.63,
                    "combined_tax_rate": 0.0625,
                    "state_taxable_amount": 10,
                    "state_sales_tax_rate": 0.0625,
                    "state_amount": 0.63,
                    "county_taxable_amount": 0,
                    "county_tax_rate": 0,
                    "county_amount": 0,
                    "city_taxable_amount": 0,
                    "city_tax_rate": 0,
                    "city_amount": 0,
                    "special_district_taxable_amount": 0,
                    "special_tax_rate": 0,
                    "special_district_amount": 0
                }
            ]
        }
    }
}

The TaxJar API also handles other tricky clothing taxability states like New York where clothing under $110 isn’t taxable… some of the time. You can read more here about how the TaxJar API makes it easy to charge the right amount of sales tax to your New York customers.

The TaxJar API makes short work of difficult sales tax calculations. You can go here to read more about how the TaxJar API supports the most commonly sales tax-exempted product categories like food, textbooks and digital goods.

To find the right plan for you, check out TaxJar today!