Example 1:
During 2012, a full year resident taxpayer with adjusted gross income (AGI) of $65,000 purchases furniture for his Massachusetts personal residence from an out-of-state firm and pays no sales tax. The cost of the furniture is $2,500. The taxpayer is required to compute actual sales tax of $156 ($2,500 x .0625).

Example 2:
In addition to the $2,500 furniture purchased in example 1, the taxpayer purchases an appliance for his Massachusetts personal residence from an out-of-state firm. The cost of the appliance is $2,100 and the taxpayer pays sales tax of $165 to the out-of-state firm on the appliance.

Taxpayer would fill out the worksheet as follows:

2012 Form 1, Line 33 Worksheet (Line 38 for Form 1-NR/PY) - Use Tax Due on Out-of-State Purchases

A Massachusetts use tax of 6.25% is due on your taxable purchases of tangible personal property purchased for use in Massachusetts on which you did not pay Massachusetts sales or use tax. These include, but are not limited to, purchases made out-of-state, on the Internet or from a catalog, where no Massachusetts sales tax was paid. The use tax does not apply to out-of-state purchases that are exempt from the sales tax (for example, clothing that costs $175 or less).

Examples of taxable items include computers, furniture, jewelry, cameras, appliances, and any other item that is not exempt. Generally, anyone who pays a sales or use tax to another state or territory of the United States on tangible personal property to be used in Massachusetts is entitled to a credit against the Massachusetts use tax, up to 6.25%. This credit is allowed for sales or use tax paid to another state only if that state has a corresponding credit similar to the Massachusetts credit. See TIR 03-1 for more information. Prepare and retain with your records a list of your purchases in 2012 that are subject to the Massachusetts use tax.

Complete the following worksheet to calculate your use tax if you are not self-reporting a "safe-harbor" amount. For more information about use tax, visit DOR's website at www.mass.gov/dor.

1. Total purchases in 2012 subject to Massachusetts use tax. Part-year residents, total purchases made while a Massachusetts resident.

$4,600

2. Use tax. Multiply line 1 by .0625 (6.25%)$288
3. Credit for sales/use tax paid to other states or jurisdictions. Add the amount of any sales/use tax paid to another state or jurisdiction, or 6.25% of the sales price, whichever is less, on each purchase reported on line 1

$131

4. Total amount due. Subtract line 3 from line 2. Not less than "0." Residents, enter the result here and on From 1, Line 33. Part-year residents, enter the amount here and on Form 1-NR/PY, line 38

$157


“Safe-harbor” Amount of Use Tax Based on their Massachusetts Adjusted Gross Income
Taxpayers may use the following table to self-report a "safe-harbor" amount of use tax based on their Massachusetts adjusted gross income. A taxpayer may pay this amount in lieu of the actual amount of use tax that would otherwise be due with respect to such purchases. Individual taxpayers electing to report use tax under this method will not be assessed additional use tax on audit, even if the actual amount of use tax due would have been greater than the amount from the schedule. The estimated liability applies only to purchases of any individual items each having a total sales price of less than $1,000. For each taxable item purchased at a sales price of $1,000 or greater, the actual use tax liability for each purchase must be added to the amount of the estimated liability from the table below. See TIR 04-26 for more information.

In Example #2, taxpayer would not have this option since both purchases were for $1,000 or more.

 
Massachusetts 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 above $100,000, multiply by .000625.
* AGI per return: From line 7  Massachusetts AGI Worksheet. 

For more information on Use Tax Due on Out-of-State Purchases

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