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Massachusetts’ sales tax is relatively simple compared to that of other states. The statewide rate is 6.25%, which applies across all cities and counties. Read our guide to learn more about the tax system in the Bay State, including current regulations, filing requirements, sales tax exemptions, and other key aspects.
Key takeaways
- Massachusetts charges a sales tax of 6.25%, which is applied to the sale or rental of tangible personal property and telecom services.
- Remote vendors making over $100,000 in Massachusetts sales annually must collect and remit sales tax. The same applies to companies that maintain a physical presence in the state.
- Certain goods, such as most clothing items under $175 and food products other than restaurant meals, are not taxable. Newspapers, admission tickets, and utilities for small businesses and residential users are exempt, too.
- Businesses must file sales tax returns monthly, quarterly, or annually based on the amount of sales tax collected. Note that tax-exempt sales count toward the $100,000 threshold.
The Massachusetts state sales tax rate in 2025 is 6.25%. There is only a statewide tax and no local taxes in this state.
Sales Tax 101: Sales tax is a percentage-based fee that businesses add to the price of certain goods and services at the point of sale. These funds are remitted to the state and then used to support public services like education, healthcare, and government programs.
As an entrepreneur, it's your responsibility to calculate and collect sales tax in the states where you have physical or economic nexus. Failure to do so can result in fines, penalties, and audits that may disrupt business operations.
Numeral can assist you every step of the way to ensure you meet your tax obligations and stay compliant. From nexus monitoring and sales tax registration to exemption certificate management, we’ll do all the heavy lifting for you.
Do I need to collect Massachusetts sales tax?
Retailers with a physical or economic nexus in Massachusetts must register for, collect, and remit sales tax. This requirement also applies to certain service providers, such as telecoms.
Nexus: What it means and how it affects your business
Physical nexus
Physical nexus means having a tangible business presence within a state, which triggers the obligation to collect and remit sales tax. Think of a brick-and-mortar computer store or a business holding inventory in Massachusetts.
The same applies if you have employees or sales reps in a particular state. Or if you work with independent contractors based in that state. In any of these scenarios, you must register for a seller's permit and collect sales tax.
Economic nexus
The Bay State requires online sellers who meet certain revenue thresholds to collect sales tax. This is called economic nexus and applies to both in-state sellers and remote businesses serving Massachusetts customers.
Any online vendor or marketplace facilitator with over $100,000 in annual Massachusetts sales must register for a seller’s permit. Once registered, they have the legal obligation to:
- Collect Massachusetts sales tax
- File sales tax returns based on the filing frequency allotted to their business license
- Remit sales tax to the MA Department of Revenue
Registration ensures proper payment of sales tax on online transactions. Failure to register when required can lead to interest, penalties, or legal issues.
TIP: In Massachusetts, economic nexus can be triggered by tax-exempt sales. That’s right—even if you sell only exempt items, such as clothing under $175, newspapers, or concert tickets, the total dollar amount of those sales still counts toward the $100,000 threshold.
Given this aspect, it’s important to monitor total sales volume, not just taxable transactions. Consider using Numeral to keep your exemption certificates organized and track nexus thresholds.
Is Massachusetts’ sales tax destination-based or origin-based?
Massachusetts is a destination-based sales tax state. Businesses collect sales tax based on where their customers receive the products or services ordered.
What’s the difference between destination-based and origin-based sales tax states?
In destination-based sales tax states, businesses calculate sales tax based on the customer’s location. Origin-based sales tax states collect tax based on where the vendor is located.
What's taxable?
Massachusetts charges sales tax on the sales or lease of tangible personal property and telecom services. Let’s see a few examples of taxable products.
Which ecommerce goods are taxable?
With a few exceptions, most ecommerce products sold to Massachusetts consumers are taxable. Here are the main categories:
- Phones, laptops, and other electronics
- Jewelry and fashion accessories
- Athletic apparel
- Protective helmets
- Home goods, such as furniture and kitchenware
- Beauty products
- Toys and games
- Books
- Alcoholic beverages
- Tobacco products
- Soda
- Candy
- Software delivered electronically or via physical media
Is software-as-a-service (SaaS) taxable in Massachusetts?
Yes, Massachusetts charges sales tax on software-as-a-service (SaaS) unless the product is sold to nonprofits, government entities, or educational institutions.
For instance, if your business offers a cloud-based learning management system to universities, you’re not required to collect Massachusetts sales tax. Just make sure the buyer can provide a valid exemption certificate confirming its educational status.
Exemptions
Some goods are exempt from sales tax. These include but are not limited to:
- Unprepared food items
- Food (except for restaurant meals) and clothing under $175
- Periodicals like newspapers and magazines
- Admission tickets
- Residential utilities
- Professional services
- Prescription drugs and medical equipment
- Casual/isolated sales
- Sales for resale with a valid exemption certificate
- Sales to exempt organizations with a valid exemption certificate
Excise taxes in Massachusetts
Alcohol, tobacco, fuel, and other goods sold in Massachusetts are subject to excise taxes. How much you’ll pay depends on the quantity and type of product sold.
- Alcohol excise tax: Malt beverages (beer) - $0.106 per gallon; wine - $0.55 per gallon; distilled spirits - $4.05 per gallon.
- Tobacco excise tax: Cigarettes - $3.51 per pack of 20; smokeless tobacco - 210% of the manufacturer's price; cigars - 40% of the wholesale price; vaping products - 75% of the wholesale price.
- Gasoline and diesel fuel excise tax: $0.24 per gallon
- Marijuana excise tax: 10.75% retail excise on recreational marijuana. Medical marijuana is exempt. Host Communities, which include cities or towns where a marijuana establishment operates, may impose a tax of up to 3% on recreational marijuana retail sales.
- Motor vehicle excise tax: Personal cars and other motor vehicles sold in Massachusetts are subject to an annual excise tax—typically $25 per $1,000 of the vehicle’s value. The minimum tax rate is $5 per year.
- Room occupancy excise tax: Massachusetts imposes a 5.7% excise tax on rentals of 90 days or less in hotels, motels, B&Bs, and similar establishments unless the total amount of rent is under $15 per year. This regulation also applies to property rentals of 31 days or less. Additionally, cities and towns may charge local excise taxes of up to 6% (or 6.5% in Boston).
How to register for a Massachusetts sales tax permit
The Massachusetts Department of Revenue features an online portal where you can register your business, file sales tax returns, make payments, and more. Follow these steps to apply for a seller’s permit via MassTaxConnect:
- Sign up on MassTaxConnect:
- You'll need your EIN, business start date, legal and mailing addresses, and owner/officer info.
- Sole proprietors can use their SSNs to register.
- Upon registration, wait to receive a Form ST-1 sales tax certificate by mail.
- Display this certificate prominently at your business location.
- Start charging, collecting, and remitting Massachusetts sales tax on taxable sales.
Make sure you file sales tax returns even for periods with no sales. Also, keep detailed sales records for at least three years.
TIP: Automate sales tax registration with Numeral. Enter some basic information about your business, connect your billing system, and activate Autoregister. Our platform will handle the rest, automatically registering your company for a seller’s permit in Massachusetts or other states where you have nexus.
Cost of registration for a Massachusetts sales tax license
Applying for a Massachusetts sales tax license is free. There are no state fees associated with the registration process.
I didn't collect any Massachusetts sales tax. Do I still have to submit a return?
Yes, you must still file a sales tax return in Massachusetts even if you didn't collect any sales tax during the reporting period. Filing a return ensures your records with the Department of Revenue are up-to-date.
Filing schedule and due dates
Businesses must submit their sales tax returns by the 30th of the month after the end of the reporting period. If the deadline falls on a weekend or public holiday, it shifts to the next business day. Filing frequency depends on the amount of sales tax collected.
If you owe sales tax, you have three options for filing your returns: online through MassTaxConnect, by mail using Form ST-9, or via third-party platforms like Numeral. Our platform automates sales tax filing and remittance, ensuring you never miss a deadline.
Monthly filing schedule
Vendors who collect $1,201 or more in sales and use tax must file monthly.
Quarterly Filing Schedule
Vendors who collect between $101 and $1,200 in sales and use tax are required to file every quarter.
Annual Filing Schedule
Vendors who collect $100 or less in sales and use tax are required to file annually.
Penalties
If you miss the deadline for filing your sales or use tax returns in Massachusetts, you're looking at some pretty steep penalties and interest charges. Here's the breakdown:
- Late payment: If you don’t pay your taxes by the deadline, you will be charged a late penalty fee. The penalty is 1% of the amount of unpaid tax for each full or partial month the payment is late, capped at a maximum of 25%.
- Late filing: Not filing your tax return by the deadline will also result in a penalty. The penalty is 1% of the amount owed for each full or partial month the tax return is filed late, up to 25% of the balance due.
- Interest charges: On top of the penalties, you'll also be charged interest on the unpaid amount. The rate is the federal short-term rate plus 4%, and it's compounded daily. You can call the Department of Revenue's Contact Center at (617) 887-6367 to get the current rates.
- Underpayment penalties: If you underpay your tax because you neglected or disregarded tax laws or substantially understated your tax liability, you could face a penalty of 20% of the underpayment. This kicks in if the underpayment exceeds 10% of the tax required to be shown on the return or $1,000, whichever is more.
- Willful tax evasion: This is a felony and comes with a fine of up to $100,000 for individuals or $500,000 for corporations. You could also end up in prison for up to five years.
- Failure to collect and pay over taxes: This is another felony, punishable by a fine of up to $10,000 and/or imprisonment for up to five years.
- Non-compliance penalties: If you don't comply with the requirements for filing returns, making payments, or electronically submitting data, you could be penalized up to $100 for each incorrect submission.
TIP: Hire a tax expert like Numeral to avoid filing penalties. Numeral guarantees 100% accuracy in any filings, or it bears the penalties. Top DTC brands like Obvi, immi, and many others spend less than 10 minutes each month on their sales tax—and you can, too.
Audit & appeals process
So, you've received an audit notice from a tax examiner. This usually means they either need more information about something on your return, or they’ve found a potential error they want to review.
Whatever the case may be, you must respond to these notices, or you could be charged additional interest and penalties.
What to expect during a tax audit in Massachusetts
- Initial contact: You get an official letter from a DOR auditor explaining what triggered the audit. This could be a missing form, a mismatch in reported income, or other issues that require your attention. The notice will outline what documents they want and give you a deadline to respond.
- The meeting: You and the auditor will go over your records and discuss potential issues. During this process, you’re allowed to ask questions, explain your position, and provide context for any discrepancies.
- Time frame: In most cases, auditors look at your last three years of returns. But if they believe you underreported income or failed to file, they can go back as far as six years.
- Extending the audit: Sometimes, the DOR may ask for more time to complete the audit. You can say yes or no, but if you refuse, they will make a decision based on existing information, which may not be to your advantage.
- Bring backup: You have the right to authorize a tax professional to deal with the auditor on your behalf. If you decide to do so, fill out a Power of Attorney (Form M-2848) beforehand.
- Stay in touch: Always respond to letters, calls, or emails from the DOR in a timely manner. Even a minor delay can lead to bigger problems, such as an appeal window closing without you realizing it.
Types of audits
The Massachusetts Department of Revenue conducts different types of audits based on the nature and complexity of each case. These may include:
- Desk audits: Think of desk audits as the DOR’s version of a paper trail check. These are straightforward and usually resolved through letters between you and the DOR. First, you'll get a Notice of Intent to Assess (NIA) or a Notice of Failure to File (NFF), depending on the issue. Respond promptly and submit the required documents to avoid additional charges.
- Field audits: The meeting takes place at your business location, your accountant's office, or a DOR office. An auditor will explain what they are looking for, how they’ll go about it, which years are involved, and the documents you must submit.
In either scenario, it’s important to take the audit seriously. Respond on time, sort out your records, and seek legal representation if needed.
Filing an appeal
Once the audit is over, you'll be briefed on the findings. This is your chance to review the results and decide on the next steps.
Depending on the outcome, you can either pay the amount stated in the Notice of Intent to Assess (NIA) within 30 days or wait for a formal bill, known as a Notice of Assessment (NOA).
- The NIA indicates the amount of tax you owe following the audit if you don’t take action or challenge the findings.
- The NOA, on the other hand, is an official tax bill that requires you to pay or file an amended return.
Another option is to request a settlement or a pre-assessment conference to dispute the findings. For example, you may be able to negotiate a reduced amount if you believe there’s a gray area in the audit or the risk of prolonged dispute.
If you're still unhappy with the outcome, you can apply for an abatement. This is an official request to reduce or remove the assessed tax or penalties.
TIP: If you owe back taxes, it's a good idea to pay them to avoid further penalties, even if you’re going through an appeal. The reason is that interest keeps adding up, increasing the amount due over time.
Sales tax FAQs
How do you calculate Massachusetts sales tax?
To calculate Massachusetts sales tax, you can use the formula:
Sales tax = (base rate + local rate) × purchase price
For instance, a $100 product would incur $6.25 in sales tax. Therefore, the total sale price will be $106.25.
Is Massachusetts a streamlined sales tax state?
Massachusetts is not a Streamlined Sales and Use Tax Agreement (SSUTA) member. The SSUTA is an agreement that standardizes and simplifies sales tax collection and administration among member states.
Is clothing taxable?
Most clothing items under $175 are not subject to sales tax. If a single item, such as a leather jacket, costs more than $175, you’ll collect tax only on the part that goes above that amount.
Note that protective gear (e.g., hard hats, safety glasses) and athletic apparel are taxable, regardless of their cost. The same goes for jockey apparel, fashion accessories, and jewelry.
Are digital products taxable in Massachusetts?
Prewritten software and related products, such as license upgrades, are treated as tangible personal property and, therefore, taxed. Ebooks, music, videos, and other digital goods delivered electronically are considered intangible, meaning you don't need to collect sales tax.
For more information, check out our guide to sales tax on digital goods. It breaks down how these rules vary across states and what they mean to your business.
Are services taxable in Massachusetts?
Professional services, such as healthcare, car repairs, and haircuts, are exempt from sales tax. The only taxable services are those provided by telecom businesses, with the exception of internet access and cable TV.
Do I need a Massachusetts seller's permit if I only sell temporarily in the state?
Occasional sales like those made by individuals or businesses that don’t normally engage in such transactions are exempt. An example would be a one-time sale of a desk and office chair by a business that’s closing down.
However, if you sell at annual trade shows, seasonal fairs, or similar events, you need a seller’s permit. Also, note that casual sales of motor vehicles, trailers, or boats are taxable.
Should you collect sales tax on shipping charges?
According to Massachusetts DOR Directive 98-5, shipping and handling charges are typically not included in the taxable sales price if the following conditions are met:
- The shipping fee is listed separately on the invoice.
- The charge reasonably reflects the costs of transportation.
- The goods are shipped after the customer completes the purchase.
- No written contract or agreement states that ownership of the goods transfers only upon delivery.
If these conditions are not met, you must add shipping and handling charges to the final price and collect sales tax on the full amount.
Can I get an extension?
You can request an extension for filing your sales tax return in Massachusetts, but you must make a payment along with your extension request. Extensions without payments are not granted.
Extension payments of $5,000 or more must be made electronically. You can file electronic extensions via MassTaxConnect or approved commercial software.
Can I amend a Massachusetts sales tax return?
Yes, you can file an amended sales tax return in Massachusetts. If you owe additional tax, you'll also need to pay any interest or penalties that may apply.
What are the penalties for not paying Massachusetts sales tax?
Vendors who fail to pay Massachusetts sales tax on time may face the following penalties:
- Interest charges: You will be charged interest at the federal short-term rate (which can change every quarter) plus 4%, compounded daily.
- Late payment penalty: 1% of the unpaid tax per month, up to a maximum of 25%.
- Failure to file penalty: 1% of the balance due per month, up to a maximum of 25%.
- Substantial understatement penalty: 20% of the underpayment if it exceeds 10% of the tax due or $1,000.
Does Massachusetts have sales tax holidays?
The state’s 6.25% sales tax will be temporarily waived on most retail items under $2,500 on August 9 and 10, 2025. The sales tax holiday covers qualifying retail purchases intended for personal use only.
Information & contacts
For sales tax filing queries and appeals in Massachusetts, contact:
Massachusetts Department of Revenue (DOR)
Website: Massachusetts Department of Revenue
Tax line: (617) 887-6367
Massachusetts’ sales tax system might look straightward, but it’s actually quite complex. For instance, some goods are taxed, some are exempt, and some are only taxable in certain situations. Plus, there are countless exceptions, even to the exceptions.
Now that you have a better understanding of Massachusetts' sales tax, take the first steps toward compliance.
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