Any business that sells goods or taxable services within the state of Massachusetts to customers located in Massachusetts is required to collect sales tax from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in Massachusetts must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.
Do you need to get a Sales Tax certificate in Massachusetts State?
You may need a Sales Tax Certificate if any of the following apply your business:
- You have a physical office or place you conduct
- You sell or ship products to a buyer in Massachusetts
- You have a distribution location such as a storage area or warehouse space
- You have employees physically present in Massachusetts for more than 2 days per calander year (including independent contractors, sales persons, representatives, or agents)
- Your business delivers merchandise in the state of Massachusetts
- Your business owns real or personal property
- Your business has economic presence (businesses who make over $500,000 in sales annually or more than 100 transactions)
- Your business has a physical presence at a trade show in the state of Massachusetts
- Your business has taxable services in the state of Massachusetts
What constitutes taxable services in Massachusetts State?
The majority of service businesses are not taxable in Massachusetts. The exceptions would be Telecommunication services such as cable, telephone, and internet services.
Why do I need a Sales Tax Certificate to purchase wholesale items for Resale in the State of Massachusetts?
As a wholesale company conducting business in the state of Massachusetts, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.
Do you need to collect sales tax on shipping and handling of merchandise?
If you sell tangible goods in Connecticut that are taxable than you would charge sales tax on shipping and handling charges.
Is there sales tax on drop shipments in the state of Massachusetts?
A drop shipment is where a seller (most times out of state) sells a product which is then delivered to a consumer by a third-party shipper. In most instances, drop shipments in Massachusetts are exempt and therefor are not required to have sales tax added
Are there any exemptions to taxable items sold?
General clothing, safety apparel, certain medical goods and equipment, groceries, raw materials and machinery, newspapers and magazines, child car seats, and bicycle helmets and general pollution control equipment are tax exempt
Register for a Massachusetts sales/use tax number
Massachusetts state, county, city, & municipal tax rate table