Recent Tax Changes: Overview

• Increase the sales and meals tax from 5.0% to 6.25%, effective August 1, 2009.  For more information see TIR 09-11: Change in Rate, Scope, and Computation of Sales/Use Taxes. A 6.25% Sales Tax Collection Schedule (PDF) also is available.
  

  • Click here to see how to report for a period that includes both sales before and sales after the change in sales/use tax rates.

    
    
• Allow for a local option tax of 0.75% on meals, with all the funds staying in each community that votes to adopt the tax.  This provision is effective October 1, 2009.  For more information see TIR 09-13: Local Option Sales Tax on Meals and Local Option Room Occupancy Excise Rate Increase and Local Option Excises  .  
  
  

  • Click here to see which communities have adopted the local option meals tax.

  • If your community has adopted the local option meals tax, click here  to find your city/town locality code that must be entered on Form ST-MAB4.

  • Click here for revenue estimates by municipality.
    
    

• Remove the sales tax exemption for alcoholic beverages taxed under M.G.L. c. 138.  Effective August 1, 2009, this means that store sales of alcoholic beverages will now be taxable as sales of tangible personal property. Previously, alcohol sold at a restaurant was subject to meals tax, but non-restaurant sales were exempt from sales tax. For more information see TIR 09-13: Local Option Sales Tax on Meals and Local Option Room Occupancy Excise Rate Increase.
  
  
• Increase the local option room occupancy rate from 4% (4.5% for Boston) up to 6% (6.5% for Boston), effective August 1, 2009. However, October 1, 2009 is the earliest an acceptance can become operative for FY10. Note: the current statewide rate of 5.7% is unchanged.  For more information see TIR 09-13: Local Option Sales Tax on Meals and Local Option Room Occupancy Excise Rate Increase & Local Option Excises  .
  
  

  • Click here to see which communities have adopted the local room occupancy tax

  • Click here for revenue estimates by municipality

    
    
• Provide for the local taxation of all poles and wires owned by telephone and telegraph, cable television, internet, data service and other telecommunications corporations and located on public ways. This provision is effective beginning in FY10. For more information see Taxation of Poles and Wires on Public Ways (PDF).
  
  
• Impose a 5% gross receipts tax on receipts of satellite TV providers from subscriptions. This change is effective August 1, 2009. For more information see TIR 09-14: Taxation of Direct Broadcast Satellite Service.
  
  
  • Click here  for Form M-SSR - (Monthly Satellite Service Return)
    
    
• Decouple Massachusetts from certain aspects of the American Recovery and Reinvestment Act of 2009 (the federal stimulus bill) (i) to avoid revenue losses to the Commonwealth from certain federal changes to corporate tax law and (ii) to prevent the collection of state personal income taxes from unemployed individuals who are eligible to receive subsidies for nine months to offset their COBRA costs for health insurance premiums.
  
  
• Make the existing dairy farm income tax credit 100% refundable.
  
  
• Raise the maximum reduction in property taxes seniors may earn for performing work for their communities from $750 to $1,000. 
  
  
• Recent Tax Changes: Frequently Asked Questions