The recently signed
Massachusetts budget includes provisions to increase the sales and meals
taxes for the first time since 1975. The increase to 6.25% will make
Massachusetts sales and meals taxes the 3rd highest in the region. New
York and Rhode Island will still have higher rates and the meals tax
will continue to be higher in New Hampshire than in Massachusetts. The
room occupancy tax is also going to rise.
As of August 1, 2009:
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The sales and meals tax rates will be 6.25%
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Sales of alcoholic beverages will be subject to
sales tax (they used to be exempt)
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For hotels, the local option room occupancy rate
will go to 6% (6.5% for Boston). The current statewide rate will
stay at 5.7%. This means the total rate would go from 9.7% to 11.7%
(12.2% in Boston)
As of October 1, 2009:
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Local cities and towns will have the option to
add 0.75% to the meals tax, with the funds raised staying in that
community.
Be sure to update your
accounting software to reflect the new rates as of August 1st and, if
needed, October 1st
For example, in QuickBooks you
can edit the rate of the Massachusetts sales tax in the Items List. From
that point on, the sales tax will be calculated at the new rate. If you
sell alcoholic beverages at retail and have set up sales tax exempt
items in your accounting software for these sales you will need to
change the items to reflect their new taxability.
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