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Sales Tax

Massachusetts imposes a 6.25% sales and use tax on all tangible, physical products being sold to a consumer and on certain services. Its sales tax base is narrowly defined, however. In addition to exempting food, clothing, prescriptions and other basic necessities, Massachusetts exempts most services, several manufacturing business inputs and several other items.

MTF analyzes how the Massachusetts sales tax code compares to its peer states with respect to its tax rate, what types of transactions are taxable, and what both buyers and sellers must do to comply with the law. With the emergence of internet sales and the acceleration of online purchases, issues such as taxation of internet sales, tax collection responsibilities of remote sellers’ nexus, the process for remitting sales tax and other such issues have surfaced.

MTF examines the sales tax from both a budgetary and fiscal perspective, as well as the impact that our sales tax policies have on our competitive standing among the states that impose a sales tax.