September 11, 2015
Massachusetts Use Tax
Massachusetts Use Tax
DO YOU OWE USE TAX?
A 6.25% Massachusetts use tax is due on your taxable purchases from out-of state or out-of-country businesses of tangible personal property for use in Massachusetts on which the Massachusetts sales or use tax on the items has not been paid. The use tax does not apply to out-of-state purchases that are exempt from the sales tax (for example, clothing that costs $175 or less) or food. Generally, anyone who pays a sales or use tax to another state or territory of the United States on tangible personal property to be used in Massachusetts is entitled to a credit against the Massachusetts use tax, up to 6.25%. This credit is allowed for sales or use tax paid to another state only if that state has a corresponding credit similar to the Massachusetts credit.
Use tax is due when:
- Goods are purchased for personal use from out-of-state or out-of-country when the sales tax on the items has not been paid. The total purchase price of many imports is subject to "use tax."
- Goods are purchased and imported into Massachusetts for personal use, such as jewelry, artwork, antiques, furniture, computers, appliances or household items and sales or use tax has not been paid.
- Goods are purchased in another state or country without paying sales tax or the amount paid was lower than Massachusetts' sales tax. The value-added tax (VAT) does not constitute a credit for sales/use tax paid. This includes items shipped, mailed or carried into the state.
- Goods are purchased out-of-state or out-of-country from a mail-order catalog, internet company or auction house and sales or use tax has not been paid.
- Supplies, furniture, fixtures and equipment are purchased from an out-of-state or out-of-country vendor for business use and sales or use tax has not been paid. Machinery and equipment used in manufacturing operations are not included.
Use Tax is not due when:
- Goods are purchased for resale within the normal course of business.
- Goods to be used as an ingredient or component part of an article of tangible personal property produced for sale.
- Sales or use tax is paid to another state or territory of the United States on tangible personal property to be used in Massachusetts. A credit of up to 6.25% is given against the sales tax paid. This credit is allowed for sales or use tax paid to another state only if that state has a corresponding credit similar to the Massachusetts credit.
Reporting and paying use tax:
Individuals may file their use tax return and pay their unpaid use tax on MA Form 1.
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