18 min read
Maryland Sales Tax Guide
Maryland is a state deeply steeped in history, science, and, of course, sweet, delicious crabs :p The 42nd smallest state in the union, Maryland has...
Massachusetts, the sixth state in the union, is filled to the brim with history and American culture. Home to Boston and starting point of the American Revolution, you can’t turn around in this state without bumping up against some history. It’s no surprise that many people are happy to live and work in Massachusetts. If you’re one of the proud small business owners calling Massachusetts home, you’ll need to stay in compliance with the Massachusetts Department of Revenue's sales and use tax laws to keep things in check. No problem! We have assembled this all-in-one guide for sales tax so that you can meet all the sales tax requirements for a small business in Massachusetts.
After reading this guide, you will have learned:
If, after reading, you still have any questions to help you determine your tax sales obligations in Massachusetts and how to fulfill them, we are here for your small business bookkeeping needs!
✅ Do you need to get in touch with the Massachusetts Department of Revenue?
✅ Are you uncertain about whether to visit, call them, or contact them through their website?
✅ Do you wonder what information you should have ready before you contact them?
If you answered “Yes” to any of these questions, please read onward, as we have just the information you need! :)
The Massachusetts Department of Revenue is reachable by phone at 617-887-6367.
You can also shoot a message to them via their website, or you may visit one of their six convenient physical locations. If you are hoping for the fastest response, we always suggest you call rather than send https://www.mass.gov/info-details/dor-contact-us#in-person-a message or visit in person.
When you do call the Massachusetts Department of Revenue, you will want to have some information on hand. It will save time to have the following information easily accessible before you call:
If you are calling on behalf of an individual or a business, or having a third party call on your behalf, you must have a Massachusetts Power of Attorney (form 2848, PDF) signed before you call or else you will be wasting your time; they can only help if you have a completed POA form.
Should you have more questions, please feel free to contact us so we can assist you with your sales tax needs.
Are you a new business selling tangible property in Massachusetts? If yes, you are going to want to register your business with the Massachusetts Department of Revenue so that you can pay your sales tax on time.
You needn’t fret as this is a fairly simple process and one for which we’re about to fully prepare you. We are going to outline the steps below so you are totally ready to register for your sales tax license.
Here we go! Remember...
Preparation is key.
Let’s get started!
You can register your Massachusetts state sales tax permit by visiting the Massachusetts Department of Revenue website and following the instructions provided.
Massachusetts doesn’t offer a paper based way to register, and we applaud them for it!
Great question!
Before you sign up for Massachusetts sales tax permit you’ll want the following information on hand:
Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the Massachusetts MassTaxConnect website.
The cost to register a new sales tax permit in Massachusetts is $0. We are always delighted to give this answer! :)
Indubitably! You will certainly need one, but if you don’t already have one and need to get a new EIN, it’s a painless process. You can register for a Federal EIN right here :).
You may additionally need to contact some of the following agencies:
You’ll want to give this some thought and do a little research or investigating; every business is unique and, as such, different rules, regulations, and laws that may apply.
We suggest contacting the Massachusetts Department of Revenue to verify which additional government agencies you may be required to register with.
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Hooray!!!
You are now prepared to register for your Massachusetts sales tax permit in Massachusetts.
Let’s summarize what we have covered so far:
Registering for your Massachusetts sales tax permit will be stress free as long as you are adequately prepared. We always recommend organizing all the essential information in a folder, preferably mirroring paper files with a system like Box.com or Dropbox (something we’re happy to handle for our customers).
By now, you may have already contacted the Massachusetts Department of Revenue and applied for a Massachusetts sales tax permit.
Once you have a license to collect and remit sales taxes in Massachusetts, you will probably be asking yourself two questions:
We are going to go over the most common sales tax questions our clients ask. We believe the answers to these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations.
Let’s start with the first question…
The following items are all taxable in the state of Massachusetts:
With exception to a few special cases, most tangible goods are taxed in Massachusetts.
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Let’s now review some of our clients’ frequently asked questions:
To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions (such as affiliate marketers).
Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.
Massachusetts is a destination-based sales tax state. This means you charge sales tax based on the location of the purchaser rather than that of the seller. Massachusetts is one of those magical states that doesn’t permit additional local taxing, so it’s the same rate throughout the state!
Protip: Charge the customer tax based on their location.
Having nexus, also known as "sufficient business presence,” with Massachusetts means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Massachusetts because you created a sales tax Nexus.
Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Massachusetts Department of Revenue even if you never step foot in Massachusetts.
So, how do you create Sales Tax Nexus in Massachusetts?
A business establishes a nexus in Massachusetts by:
Let’s talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse.
Yes, just one of them at the time of this article’s publishing:
This is relevant if you sell your products on Amazon or are recognized as an Amazon FBA (Fulfillment by Amazon) seller. When Amazon stores your products in one of its fulfillment centers in any state, including Massachusetts, this triggers a sales tax requirement. If Amazon is storing your products in a warehouse in Massachusetts, you have created a taxing connection with the state of Massachusetts.
We can help guide your small business through this! We use tools like A2X and Wherestock to identify where our clients' inventory is currently being held and shipped from so that we can keep them in compliance.
Yes! This means that even if your business isn’t located in the state or doesn’t in any traditional way create nexus, you may still have to register and pay sales tax in Massachusetts.
The threshold for creating economic nexus with Massachusetts is to have over $500,000/year in sales to Massachusetts purchasers and 100 separate transactions in a year. Remote sellers must meet both qualifications to be required to register.
For more information keep an eye on Massachusetts DOR’s remote sellers page.
No, Massachusetts has no special requirements for affiliate sales at this time. Phew :)
No, Massachusetts is not a member of the SSP. Fingers crossed they might join this efficiency boosting project 🤞!
You and your business can be better equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Massachusetts.
By now you know if you are a business that has established a nexus with Massachusetts. So you have an understanding about whether, or when, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.
Let’s review some common questions our clients have asked regarding their Massachusetts Sales Tax obligations.
After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Massachusetts.
Because Massachusetts is a destination-based sales tax state, your business should charge sales tax based on the location of the purchaser, at the time of the transaction. This is usually as simple as configuring the Point-of-Sales system accordingly. The nice thing with Massachusetts is that there are no complicating, compounding jurisdictions. Just one simple rate for the state.
At the time of this article’s publication, Massachusetts’s state-wide sales tax rate is 6.25%. Since sales tax rates may change, we suggest utilizing this link to stay up to date.
It always helps to be accurate and up to date with this type of information! :)
Here is a sample list of exemptions:
Massachusetts has a page that goes into detail on their tax exempt goods. Beyond that, everything is included in taxable goods.
At this point, you should know what products are exempt from sales tax in Massachusetts. You also want to know who may be exempt.
Under Massachusetts law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.
Other common examples of an exempt buyer may include:
Purchasers who are tax exempt must have completed an exemption certificate ST-4 (PDF) and must present their completed exemption certificate at the time of purchase. It is then up to the seller to hang on to this exemption certificate. Failure to do so may leave you unable to justify tax exempt sales.
Massachusetts provides a website to determine whether an exemption certificate is valid. Note that determining the validity via the website doesn’t reduce the requirement to hold on to the certificate for bookkeeping purposes.
Ideally this situation is to be avoided entirely! Finding out you’ll be audited and then discovering you cannot produce a required exemption certificate is a bad day. That scenario would mean you could be held liable to pay all taxes on behalf of the buyer. This whole ordeal could be easily avoided by taking proper care with your paperwork… which happens to be one of our specialties! :)
Nope :( Boo!
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We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Massachusetts state.
Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper!
It is time to talk about filing and paying your sales taxes in Massachusetts. In this section, We are going to cover the following frequently asked questions from our clients:
By the time you finish reading this, you will feel confident enough to file and pay your Massachusetts Sales Tax.
Massachusetts sales tax payments are due no later than the 20th day following the reporting interval.
The thresholds for filing intervals are based on the expected or actual tax liability owed:
Tax Amount Owed annually* |
Filing interval |
$100 or less |
Annually |
From $101 to $1,200 |
Quarterly |
$1,201 or more |
Monthly |
*based on actual sales for existing companies or projected for new ones
Not sure how to determine your tax filing frequency?
You can review your eCommerce or Point-of-Sale Software to see the volume of sales you have generated.
Don't worry though! The state will let you know when your due dates change. :)
Keep an eye out for notices in your mail from the State of Massachusetts so that you don't miss any shift in deadlines.
The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday, of course ;).
Paper: Fill out form ST-9 (PDF) and mail it to the address on the form.
Electronic: File online via the MassTaxConnect website and submit payment via EFT.
Paper: File a new form ST-9 (PDF), check the “Amended return” box, mail to address on form.
Electronic: Correct the submitted return via the MassTaxConnect site and submit payment via EFT
If you were required to collect sales taxes and failed to do so for whatever reason, that’s a big no-no! The business will be held liable for the due tax.
Always be sure to collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful.
Protip: You may still be responsible for remitting sales taxes even if you failed to collect them.
The Massachusetts Department of Revenue charges 1% penalty for late filing or failure to pay, up to a maximum of 25%. Additionally, interest is applied to any outstanding balance. The rate is tied to federal short-term rate, plus 4%, compounded daily. We suggest you file and pay on time! :)
Yes, Massachusetts requires businesses file a “Zero-Tax” return even when they have no sales during a taxing period.
Yes, Massachusetts requires businesses to file a final return via the MassTaxConnect site when closing their doors.
Nope, no discount for filing sales tax on time in Massachusetts. Unless you count not being fined for paying late! Which, we don’t. :)
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Now that we have covered all the bases for filing and paying sales taxes in the state of Massachusetts, you should feel more at ease about the process.
Some things to remember:
Now you are ready to file and pay your sales tax in Massachusetts! If you have any more questions, feel free to contact us.
Please note: This blog is for informational purposes only and the information is accurate as of 7/31/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.
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