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Learn the fundamentals of sales tax
Do you need to collect sales tax in Massachusetts?
You’ll need to collect sales tax in Massachusetts if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Massachusetts?
Massachusetts considers a seller to have physical nexus if you have any of the following in the state:
- An office, place of business, or any owned property
- An employee present in the commonwealth for more than 2 days per year
- Goods in a warehouse
- Ownership of real or personal property
- A sample or display area, such as a trade show exhibit
- Delivery of property or performance of service in Massachusetts
You can click here to read exactly what the Massachusetts Department of Revenue (Massachusetts’s taxing authority) has to say about what constitutes sales tax nexus in Massachusetts.
Do you have economic nexus in Massachusetts?
Effective October 1, 2019, Massachusetts considers vendors who make more than $100,000 in sales in the state over the preceding calendar year to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Massachusetts’s economic nexus guidance for businesses here and you can read more about economic nexus in every state here.
Is what you’re selling taxable?
Services in Massachusetts are generally not taxable. However — if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.
Tangible personal property is taxable in Massachusetts, with a few exceptions. These exceptions include clothing costing less than $175, most non-restaurant food and groceries, several health care and sanitation items, prescribed medical devices, and periodicals.
How to get a sales tax permit in Massachusetts
Businesses can register online at Massachusetts’ MassTax Connect.
You’ll need this information to register or a sales tax permit in Massachusetts:
- Identifying information about your business
- Type of business
- Owners and officers
- Description of business activities
There is no charge to register for a sales tax permit in Massachusetts. Other business registration fees may apply. Contact each state’s individual department of revenue for more about their requirements for registering your business.
Collecting Sales Tax
Massachusetts doesn’t have local sales tax rates, only a statewide tax rate of 6.25%. So you would simply charge the state sales tax rate of 6.25% to buyers in Massachusetts.
This is true whether you are based in Massachusetts or whether you are based in another state and have sales tax nexus in Massachusetts.
Should you collect sales tax on shipping charges in Massachusetts?
Shipping is generally not taxable in Massachusetts as long as you separate shipping charges on a separate line item in the invoice or sale to your customer.
Read a full explanation of sales tax on shipping in Massachusetts.
When are Returns Due?
When you file and pay Massachusetts sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Massachusetts?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Massachusetts, you will be required to file and remit sales tax either monthly, quarterly, or annually.
Massachusetts sales tax returns are always due the 30th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Massachusetts you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Massachusetts
Calculating how much sales tax you should remit to the state of Massachusetts is easy with TaxJar’s Massachusetts sales tax report.
All you do is connect the channels through which you sell — including Amazon, eBay, Shopify, Square and more — and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Massachusetts sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Massachusetts
You have several options for filing and paying your Massachusetts sales tax:
- File online – File online at the Massachusetts Department of Revenue. You can remit your payment through their online system. Businesses with more than $5,000 in tax liability must use this method to file.
- File by mail – Fill out and mail in form ST-9
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.