Understanding Sales Tax And Use Tax In Massachusetts

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Effective August 1, 2009, the MA sales tax rate is 6.25 percent of the sales price or rental charge of tangible personal property or specific telecommunications services sold or rented in MA.

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The sales tax usually is given to the vendor as an addition to the purchase price. The buyer pays the sales tax to the seller at the point of purchase; the vendor then remits the tax to the state. For car and trailer sales, however, the sales tax is paid directly to the state by the buyer.

Beginning August 1, 2009, the MA use tax is 6.25 percent of the sales price or rental charge on tangible personal property 1 (including mail order items or items bought over the Internet) or particular telecommunications services on which no sales tax, or a sales tax rate less than the 6.25 percent MA rate, was paid and which is to be used, stored or consumed in the commonwealth. The use tax, unlike the sales tax, generally is paid directly to the commonwealth by the buyer.

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Case in point: You obtain furniture for your Massachusetts enterprise or house from an out-of-state firm and pay no MA or other state sales tax. You are compelled to pay the 6.25 percent Massachusetts use tax. The use tax does apply because the items were not subjected to a sales tax in the other state and since it is for use in the state.

Concrete individual property consists of electronically transferred software.Telecommunications services consist of telephone and other transmissions of information (such as beeper services, cellular telephone services and telegram services). Cable television and Internet access are exempt from the sales tax. Generally, the tax on the sale or use of telecommunications services is a tax on the transmission of messages or information by various electronic means, but not on the sale or use of information itself.

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Need help with complex business tax issues in Massachusetts? Talk with a sophisticated Massachusetts business tax attorney. Don’t face your business tax issues on your own. Speak with a Massachusetts business tax attorney with experience handling complex taxation matters in Massachusetts.

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