If you’re selling digital services and products to customers in Massachusetts, then you might be liable for Massachusetts’ sales tax. This guide covers two very important parts of the system:
- Registering for the tax, and then
- Filing tax returns on time.
We’ve scoured the Massachusetts Revenue website to provide you with all the necessary information about sales tax for businesses in one place.
How to register for sales tax in Massachusetts
Remote sellers can register for sales tax in Massachusetts via MassTaxConnect, an online tax portal. This portal is also where you’ll file and pay your tax returns. More on that later!
International businesses must register by filling out a form and emailing it to the Massachusetts tax office. You’ll find more information below.
US businesses
The first step is to register for a sales tax permit. Before you begin, have this information handy:
- Your Social Security number (if registering as a sole proprietor with no employees)
- Your Employer Identification Number (EIN)
- Business mailing address
- Starting date of your business
Keep in mind that throughout the registration process, your business is considered a “remote retailer.” Now let’s get started!
- Go to the MassTaxConnect new business registration site. Proceed until you see the first question: Reason for Registration.
You must choose an answer from a dropdown menu on the right side of the screen, underlined in red. This is the case for most questions throughout the registration form.
- Provide standard personal information, as well as more business details. When it’s time to provide your business’ legal address, you must verify it by clicking the button below.
- Do you want to make your Massachusetts sales tax payments online? You probably do! The next question asks you for banking information to set up future electronic payments. This step is optional. You can also add other electronic payment options at a later date.
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When asked what account type you’d like to register, simply select Sales Tax and click Next.
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You need to identify which industry you’re working in by providing its North American Industry Classification System (NAICS) number. Each number is a 2-6 digit code. The form provides a search function directly on the page! Follow the directions and helpful links, if you need them.
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At two different points, you will be asked about the “date you are first required to collect Massachusetts taxes.” Enter the date of your first taxable sale in the state, or the date you surpassed the economic nexus threshold.
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Then follows a series of questions about your industry and the products you sell. These are simple Yes or No questions, and you can click on whichever answer fits your business.
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After a few more questions about your business type, you’ll need to estimate your annual sales tax in Massachusetts. This is the amount you’ll charge and collect from transactions.
- Last but not least, you’ll create the login credentials for your own MassTaxConnect profile. This is how you’ll enter the portal in the future to file returns and make payments.
- Submit!
Once you submit your request, you’ll receive an email with an authentication code. Use this code to log in to MassTaxConnect for the first time.
Once reviewed and approved, you should receive a sales tax permit. When you do, you’ll also be assigned a filing frequency: monthly, quarterly, or yearly.
How to file sales tax returns in Massachusetts
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in Massachusetts in a different currency, be sure to convert those to USD using official currency exchange rates.
When to file and pay
You must file a sales tax return either monthly, quarterly, or yearly. The deadlines are as follows:
Monthly
For monthly filers, reports are due on the 20th of the month following the reporting month. For example, the April sales tax report is due May 20.
Quarterly
For quarterly filers, reports are due on the 20th of the month following the reporting period.
- April 20, for first quarter ending March 31
- July 20, for second quarter ending June 30
- October 20, for third quarter ending September 30
- January 20, for fourth quarter ending December 31
Yearly
For yearly filers, reports for the previous year are due on January 20.
Note: Didn’t make any sales in Massachusetts during your reporting period? You should still report that. This is typically called a “zero return” and it follows the exact same process as a normal return. (Just a little less data entry 😉)
How to file
Before you get started, you should collect all the information about your taxable sales in Massachusetts during the previous quarter. The tax website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
You can file online in MassTaxConnect. Just follow these steps:
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Log in here.
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From the Summary tab, locate the Account box for the tax you are filing.
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The most recent return period due will be shown on the right; select File Now if that is the period you want to file. For all other periods, select the Returns link in the Account box.
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Select the** Period **hyperlink for the period you are filing.
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Select the File or amend a return or File now hyperlink.
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Fill in all required fields.
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Be sure to actually click Submit when you’re done!
You’ll immediately see a confirmation number. This number serves as a record of filing the tax return. You’ll receive a confirmation email, as well.
Once you’ve completed your return, you’ll receive specific instructions on how to pay.
How to pay
Tax payments must be made using US dollars.
You can pay directly in MassTaxConnect at the end of the tax declaration process, after you file your return. The portal accepts EFT payments taken directly from your bank account. Or for a convenience fee of 2.35%, you can pay with.credit/debit card:
- Visa
- MasterCard
- Discover credit and debit cards.
What to do in between registering and filing?
Well, you must comply with all the rules for Massachusetts sales tax! That means charging 6.25% sales tax and watching out for local level taxes, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Business Guide to Sales Tax in Massachusetts.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.