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 would be 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 some items that are often purchased without paying sales tax. Residents would then owe use tax based on the purchase price.
◗ Electronics ◗ Software
◗ Appliances ◗ Computers
◗ Furniture ◗ CDs and DVDs
◗ Jewelry ◗ Video games
◗ Books ◗ 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).
◗ On a trip to Maine in November you purchased an antique desk for $4,000 and paid Maine sales tax at the rate of 5.5%. The difference, $30 (.75% of the purchase price), is due Massachusetts as use tax.
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 selfreport 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.
Mass. AGI per return* Use tax liability
$25,010 – $025,000 $20
$25,001 – $040,000 $20
$40,001 – $060,000 $31
$60,001 – $080,000 $44
$80,001 – $100,000 $56
If the Massachusetts AGI per return* is above
$100,000, multiply by .000625.
*From line 7 of Massachusetts AGI worksheet.
If you did not purchase any items with a total sales price of $1,000 or more, you may enter the “safe harbor” amount from the table above directly on Form 1, line 33.
Complete the Form 1, line 33 Worksheet below to calculate your use tax if you are not reporting a “safe harbor” amount or if you purchased any individual items with a sales price of $1,000 or more. If you did purchase items with a sales price over $1,000 and you are reporting a “safe harbor” amount, add the amount from the worksheet line 4 to the “safe harbor” amount.