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.

Guide to adopting the local option room occupancy excise

Guide to adopting the short-term rental community impact fee

Notification of Acceptance forms:

• Room occupancy
• Short-term rental community impact fee

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.

Guide to adopting the local option meals excise

Notification of Acceptance form: Meals excise

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.

Guide to adopting the local option marijuana excise

Notice of Acceptance form: Marijuana

Download the adoption timetable for all local option excise taxes (room occupancy, short-term rentals, meals and marijuana)

Questions?

Please contact the Databank section of DLS's Data Analytics and Resources Bureau for assistance. Email us at: Databank@dor.state.ma.us

• Local Options Excise Training and Resources (in the DLS Municipal Finance Training & Resource Center)
• Notification of Acceptance forms for all local option statutes