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

◗ 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).

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.

Mass. AGI per return* Use tax liability

$ 0 – $ 25,000 $ 0

25,001 – 40,000 $20

40,001 – 60,000 $31

60,001 – 80,000 $44

80,001 – 100,000 56

If the Massachusetts AGI per return* is more than $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 34.

Complete the Form 1, line 34 Worksheet 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-harboramount, add the amount from the worksheet line 4 to the safe-harbor amount.