Resources Law by State Massachusetts Sales Tax Rate

Massachusetts Sales Tax Rate

Massachusetts has a 6.25% sales tax as of August 1, 2009, with numerous exceptions including (among other things): "food products" (but excluding prepared meals); residential water, gas, electric services; returnable containers, clothing and footwear up to $175 (for clothing over $175, tax is due only on the amount over $175 per item; prescription medicines, prostheses and medical appliances or services; publications for use in education or religious worship; poultry and livestock, as well as their feed; fruit and vegetable stock for generating food for humans; tools, machinery, parts, etc., for use in agriculture; cloth or other materials used for making clothing; residential heat pump, solar or wind power system; items purchased with federal food stamps; the American Flag. An enacted change in 2006 taxes computer software that is downloaded for use in Massachusetts, whereas previously this was viewed as a non-taxable "service".

A citizen initiative is expected to be on the November 2, 2010 ballot that if passed would lower the sales tax rate from 6.25% to 3%.

Massachusetts also allows towns/cities to choose a "piggyback" rate of 0.75% for meal establishments. This local option is paid by such establishments as a total 7% to the state sales tax collector, which then passes the 0.75% back along to the locality. Over 100 localities have taken up on this option,[74] and businesses should check with their town if they are included.

The state lodging occupancy tax is 5.7% with the local option of up to an additional 6%. Less than 20% of localities have the maximum occupancy tax rate of 11.7%.

On August 1, 2009, the sales tax rate in Massachusetts increased to 6.25% from 5.00%. The state’s alcohol, satellite television, meals, and hotel taxes also increased on that date.

In some years, the state government has enacted tax holidays suspending the sales tax on purchases for one weekend in August. Motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products, and any single item with a price exceeding $2,500 were excluded from the holiday.[76] This tradition was halted in 2009, when the holiday was limited to Energy Star appliances under $2,500. Governor Deval Patrick noted that the fiscal losses to the Commonwealth were too great to afford a tax holiday in the present economic climate. There was a Massachusetts sales tax holiday in 2010, on August 14 and 15.

Contact Sales Tax Accountants today for free tax assessment and sales tax questions. Call 1-877-254-0990.

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