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Do I Owe Use Tax for Massachusetts?

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Do I Owe Use Tax for Massachusetts?


If you purchased taxable tangible personal property out of state, over the Internet or from a catalog and did not pay Massachusetts sales tax at purchase, a Massachusetts use tax is due. If an item is exempt from sales tax (such as food, or clothing that costs $175 or less), it is exempt from use tax.

If you paid a sales or use tax to another state or territory of the United States when purchasing this item, you are generally entitled to a credit against the Massachusetts use tax, up to 6.25%. See TIR 03-01 for more information. No credit is allowed for a value-added tax (VAT) paid to another country.

The following are items that are often purchased without paying sales tax. Residents owe use tax based on the purchase price. - Electronics w Software - Appliances w Computers w-Furniture -CDs and DVDs - Jewelry - Video games - Books w Carpet - Artwork - Antiques

For example: You purchased several DVDs on the Internet for $100 and paid no sales tax. Your use tax liability to Massachusetts on these items is $6.25 ($100 x .0625 = $6.25).

You purchased a computer for $1,550 from a seller located outside of Massachusetts and paid no sales tax. Your use tax liability to Massachusetts on this item is $96.88 ($1,550 x .0625 = $96.88).

Taxpayers may choose the safe-harbor option for purchases of individual items each having a total sales price of less than $1,000. The safe-harbor provision makes it easier to comply with the use tax law by allowing taxpayers to self-report an estimated amount of use tax based on the average amount of online and/or out of state purchases a taxpayer in their income bracket would likely make during the year. Taxpayers do not need to keep receipts with safe-harbor reporting and will not be assessed additional use tax if audited, even if the actual amount of use tax due is greater than the safe-harbor amount reported.

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Views: 784 Created on: Jun 15, 2013
Date updated: Dec 20, 2018
Posted in: States, Massachusetts

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