What do you think of when someone mentions, Massachusetts? Perhaps Plymouth, home to the Pilgrims of the Mayflower in 1620 (the first Thanksgiving celebration took place in 1621), or the Boston Tea Party, maybe the Salem Witch Trials, the Boston (Red Sox) Baseball team, or Martha’s Vineyard, or Nantucket, Cape Cod, or any other number of costal locations. While Massachusetts does have a lengthy coast along the Atlantic, and limited size, Massachusetts features numerous distinctive regions including the hills of central Massachusetts, and the Berkshire Mountains in the western part of the state. The “Commonwealth of Massachusetts” (the official state name) is the 7th smallest state, at only 10,555 square miles, in the United States, and has nearly 6.5-million residents making it the 3rd most densely populated state.
Massachusetts was paramount in the quest for America’s independence from England; protests again British attempts to tax the colonies led to the Boston Tea Party in 1773, a direct refusal to pay the King’s tax on tea. (By the way, the ‘Tea Party’ is reenacted every year on December 16 in Boston Harbor.) Samuel Adams and John Hancock were center in the revolt that ultimately gave rise to the outbreak of the American Revolution in 1775. John Adams of Boston, was not only a major figure in America’s struggle for independence but in the formation of our Constitutional form of government; Massachusetts was the 6th state to ratify our constitution in February of 1788, the same date of recognition of statehood. Prior to 1820, the area that is today the state of Maine, was a portion of Massachusetts, however it became the 23rd state in 1820.
The oldest fully commissioned US Navy ship, the USS Constitution, perhaps better known as “Old Ironsides” is permanently berthed at Boston (Charleston) Navy Yard.
Massachusetts was a hub of progressive and abolitionist thinking in the years prior to the start of the Civil War. Massachusetts was the first state to recruit, train and arm a Black regiment with White officers. In 1852, Massachusetts became the first state to make school attendance compulsory, Horace Mann made the state’s school system a national model.
While Massachusetts boomed with industry and growth during the Industrial Revolution, but America’s Great Depression resulted in a collapse of the three largest industrial trades including textiles, shoemaking and precision machining. But during World War II, Massachusetts became a major military armaments manufacturer and their economy began growing again. Today, the state’s economic sources stem from finance and insurance, tourism, biotechnology, electronics and computers, and education. Massachusetts was the birthplace of such inventions as the sewing machine, liquid-fueled rockets, the game of Volleyball, vulcanized rubber, and the birth control pill.
Massachusetts is the birthplace of four U.S. Presidents including John Adams, John Quincy Adams, John F. Kennedy, and George W. Busy. It also happens to be a state full of Historical ‘firsts’ including the first subway system (Boston), first public park (Boston Common), first public beach (Revere Beach), first public school (Mather in Dorchester) and first college in North America (Harvard).
About Sales Taxes and this series:
Thanks to Avalara, the 'tax people', this article is one in a 50 part series covering sales tax issues associated with each and every state tax jurisdiction in the United States. We’re publishing "Sales Tax Tuesday" every week through 2015.
Sales tax provides critical revenue for states. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 states that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series is intended to insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts1:
- Massachusetts’ state sales tax rate is 6.25%.
- There is no local sales tax.
- Massachusetts exempts clothing purchases under $175 (per item) from sales tax. Items priced over that amount are subject to the sales tax on the amount over $175.
- All real and tangible personal property located within the Commonwealth of Massachusetts is taxable unless specifically exempted by statute.
- Taxable and exempt items vary. For example, certain periodicals (newspapers, magazines) are exempt from sales tax but electronically transferred software is taxable. Find the full list here.
- Traditionally waiting until the last minute ever year, Massachusetts lawmakers finally voted on July 29 to keep it’s Back to School sales tax holiday in effect for August 2015.
- Massachusetts is a destination sourcing state. This means that sales tax is based on the location of the buyer.
- Massachusetts is not a member of Streamlined Sales Tax (SST)
Did you know?
You booze, you lose: Alcohol is exempt from sales tax in Massachusetts, but only inside Bay State boundaries. Bring home any out-of-state wine, beer or liquor and you could be branded a bootlegger. Residents must obtain a special permit to bring any amount of alcohol—even a single bottle of wine or six-pack of beer—back in to Massachusetts.
By the way, do you know what famous Massachusetts family, was rumored to have made their early money bootlegging?
Just roll with it. The world isn’t flat, but a sandwich is in Massachusetts. Following a lease dispute between two retailers regarding the taxable sales of competing food items, the state ruled that burritos don’t fall into that same category as sandwiches due to how they’re put together. But that doesn’t mean you get to skip the sales tax. Dine in or take out, it doesn’t matter; both are considered prepared meals and taxable. And that’s a wrap.
Manual sales and use tax management, no matter what the particulars or persuasions, is prone to error and consumes valuable time in pass-through rather than revenue-generating activities. No matter how many cities, counties or sales tax jurisdictions you collect and remit tax for, Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting.
So whether you have a hard time figuring if you are selling a taxable publication, or taxable prepared foods (either a sandwich or a burrito), you won't have a worry when it comes to compliance because automation of your business sales tax, including integration with QuickBooks via AvaTax, will insure that your business is fully sales tax compliant without sacrificing your operation's productivity.
1 - State by State Sales Tax - Massachusetts, Avalara – July 31, 2015