Information about locally adopted excise taxes (meals, room occupancy, short-term rentals, adult use marijuana)
Cities and towns may adopt certain statutes that authorize a local tax on meals, rooms including short-term rentals, and the sale of recreational adult-use marijuana. This page explains the process to follow when adopting one of these statutes, and provides data related to the local options.
Overview: Adopting Local Option Excise Taxes
Adopting Local Option Excise Taxes - view the presentation slides here (PDF).
In addition to the 5.7% state excise, Massachusetts cities and towns are permitted to charge a local room occupancy excise tax of up to 6% (6.5% for Boston). Since July 1, 2019, cities and towns that have adopted a local room occupancy excise may also vote to charge an additional community impact fee up to 3% on short-term rentals.
A city or town may impose a local option meals excise of 0.75% on sales of restaurant meals sourced within that city or town. This local excise is imposed in addition to the 6.25% state sales tax on meals, bringing the effective tax rate on sales of meals to 7% in a city or town adopting the local option.
Cities and towns may impose a local excise of up to 3% on the retail sale of recreational marijuana. Medical marijuana as defined by 830 CMR 64N.1.1 is exempt from taxation.
