State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Massachusetts (MA)

MA Sales Tax - Name of Tax and General Application:

Massachusetts imposes a tax on retail sales of tangible personal property and on certain services performed in the state. This tax is known as a "sales tax". Additionally, there is a tax imposed on the use, storage or consumption of tangible personal property and certain services performed in the state. This tax is known as a "use tax". Use tax does not apply where sales tax has already been paid.

MA Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Massachusetts requires vendors who are "engaged in business in the commonwealth" to collect use tax on their sales. To be engaged in business in the commonwealth, a vendor would have to own real property in the state, have one or more employees located in the state, maintain tangible personal property for sale in the state, or regularly lease tangible personal property for use in the state. Engaging in business also includes having a business location, regularly soliciting sales of tangible personal property or services for delivery into the state or regularly engaging in the delivery of products into the state.

MA Local Tax - Do Localities Impose Tax?

No, Massachusetts does not impose local sales tax.

MA Resale Certificate Renewal Agreements:

A resale certificate in Massachusetts allows a purchaser to make a purchase of tangible personal property without remitting tax when purchased for resale. The liability of tax due is shifted from the seller to the purchaser.

MA Resale Certificate Renewal Periods

There is no stated expiration period.

MA Statute of Limitations

Later of three years from the date the return was due or the date the return was filed. Six years if the tax has been underpaid by 25% or more.