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DOR Sales Tax Direct Payment Permit Program

Businesses holding Direct Payment Permits pay sales tax directly to the Department of Revenue (DOR), instead of paying a sales tax to the vendor at the time of purchase.

The Direct Payment Permit Program is geared toward larger businesses which have computerized record keeping and could expect to remit sales taxes under a Direct Payment Permit in the range of $50,000 or greater on an annual basis. Direct payment permits allow businesses to self-accrue more of their tax liability and reduce paperwork and bookkeeping. Each month taxpayers review purchases, determine which purchases are subject to Massachusetts sales tax, and remit tax directly to the DOR. Since no tax is paid at the time of purchase, the taxes on purchases can be allocated to the proper state, classified as taxable or not taxable, and remitted on taxable purchases only. Software is available from a variety of providers which can analyze purchases, determine the proper taxing jurisdiction and rate, apply the tax rate to taxable purchases, and create remittance journals.

Direct Payment Permits are not issued automatically. Permits are issued only to businesses for business purchases. Taxpayers requesting a Permit must submit an application along with substantiating data. Applications are reviewed in detail prior to Permit issuance. All taxpayers applying for a Direct Payment Permit must be registered as a Vendor for Sales/Use Tax in order to receive the Direct Payment Permit.

To learn more about and apply for the Direct Payment Program visit 
Direct Payment Permit Program and Form DPP1 Application.

Also visit 830 CMR 64H.3.1: Direct Payment Program.

Call (617) 887-6367 with Direct Payment Program related questions.

 

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