Do You Charge Sales Tax On Services In Massachusetts

WHICH Goods AND SERVICES ARE TAXABLE?

Determining whether or not the products or services your company sells are taxable in Massachusetts is the starting time footstep in sales revenue enhancement compliance.

Traditional Goods or Services

Goods that are discipline to sales revenue enhancement in Massachusetts include physical property, like furniture, dwelling house appliances, and motor vehicles.

Prescription medicine, groceries, gasoline, and clothing are alltax-exempt.

Some services in Massachusetts are subject to sales taxation. For a detailed list of taxable services view the listing of tax-exempt items from the Massachusetts Department of Acquirement website.

Digital Goods or Services

A digital good or service is annihilation electronically delivered, such as an anthology downloaded from iTunes or a film purchased from Amazon.

Massachusettsdoes not crave businesses to collect sales tax on the sale of digital goods.

Notwithstanding, Massachusetts has one exception to this policy. Businesses must collect sales revenue enhancement on pre-written estimator software that is sold online.

HOW TO REGISTER FOR MASSACHUSETTS SALES Taxation

If you adamant that you need to charge sales tax on some or all of the goods and services your business sells, your next step is to register for a seller's permit. This allows your business to collect sales taxation on behalf of your local and state governments.

In society to annals, yous volition need the following information:

Identifying information about your business
Type of business concern
Owners and officers
Description of business activities

Annals for a Seller's Permit online through the MassTax Connect Website.

GET A SELLER'S PERMIT

Fee: None

Expiration: None

Save Money with a Resale Document

With a resale certificate, also known every bit a reseller's permit, your business organisation does non have to pay sales tax when purchasing goods for resale.

Download the Resale Certificate through the Massachusetts Department of Revenue

Download Resale Certificate

Instruction: Present the certificate to the seller at the time of purchase.

COLLECTING SALES TAX

After getting your seller'south permit and launching your business, you will demand to determine how much sales tax you need to charge different customers. To avoid fines and the risk of costly audits, information technology's important for business concern owners to collect the correct charge per unit of sales tax.

When calculating sales tax, you'll need to consider the following kinds of sales:

Shop Sales
Shipping In-State
Out-of-State Sales

In-country Sales

Calculating sales tax on goods sold in Massachusetts is like shooting fish in a barrel. Merely charge the 6.250% flat sales taxation rate on all items whether selling in shop or shipping across the land.

Out-of-state Sales

Massachusetts businesses only demand to pay sales tax on out-of-state sales if they havenexus in other states.Nexus means that the business has a physical presence in another country.

Mutual types ofnexus include:

Aconcrete location, such every bit an office, shop, or warehouse
Anemployee who works remotely or who is a traveling sales representative
Amarketing affiliate
Drop-shipping from a 3rd party seller.
Atemporary physical location, including festival and off-white booths.

FILE YOUR SALES Taxation Render

Now that y'all've registered for your Massachusetts seller's permit and know how to charge the correct amount of sales tax to all of your customers, yous are all set to file your sales tax return. Only exist sure to go along upward with all filing deadlines to avoid penalties and fines.

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How to File

Massachusetts requires businesses to file sales tax returns and submit sales tax payments online.

File the Massachusetts Sales Tax Return

You can file online using the Sales Revenue enhancement Web File page of the Massachusetts Department of Revenue website.

FILE ONLINE

How Ofttimes Should You File?

How often y'all demand to file depends upon the total amount of sales tax your business collects.

Annual filing: If your business concern collects less than $viii.33 in sales tax per month then your concern should elect to file returns on an annual basis.
Quarterly filing: If your business concern collects between $8.33 and $100 in sales tax per month so your business organisation should elect to file returns on a quarterly basis.
Monthly filing: If your business collects more than $100 in sales tax per month then your business should file returns on a monthly basis.

Note: Massachusettsrequires you to file a sales tax render fifty-fifty if you have no sales revenue enhancement to report.

Filing Deadlines

All Massachusetts sales tax render deadlines fall on the20th day of the month, unless it is a weekend or federal holiday, in which case the deadline is moved back to the next business solar day. Below is a listing of this year's filing deadlines:

Annual filing: January xx, 2020

Quarterly filing:

Q1 (January. 20 - March twenty):Due April twenty
Q2 (April 20 - June xx):Due July 20
Q3 (July twenty - Sept. 20):Due Oct. 22
Q4 (Oct. 20 - Dec. 20):Due Jan. 22

Monthly filing: The20th of the following month, or the adjacent business organization day, east.chiliad.April 20th for the calendar month of March, orMay 22th for the month of April.

Penalties for Tardily Filing

Massachusetts charges alate filing penalty of 1% per calendar month or partial month up to a maximum of 25% of the tax that is reported on the taxation return. If this penalization has been applied, no other punishment will be applied.

Massachusetts also charges alate filing penalization that is equal to one% per calendar month up to 25% of the tax that has been filed simply remains unpaid.

The state assesses an involvement rate that is charged on any unpaid sales revenue enhancement based on the federal short-term rate plus an additional 4%; compounded daily. This rate can change every quarter.