Statewide Contractors are required to pay a quarterly Administration Fee equal to 1% of the total dollar amounts (adjusted for credits and refunds) paid by Eligible Entities purchasing from the associated Contract(s). Statewide Contractors are required to pay the Administration Fee regardless of whether the contract was awarded for statewide or regional coverage.
Note: If the 1% Administration Fee is deductible as a business expense for federal income tax purposes, it also is deductible as an expense for Massachusetts tax purposes.
Quarterly Administration Fee Reporting Requirements
In accordance with their contractual agreement with the Commonwealth, Statewide Contract Vendors are required to pay a quarterly Administration Fee equal to 1% of total dollar amount, adjusted for credits or refunds, paid by Eligible Entities purchasing from the associated Statewide Contract. Refer to the Administration Fee FAQs for additional information.
Important Changes Effective October 2022 - New Administration Fee Payment Process and Revised Deadlines for Sales Reporting
Effective October 2022, Statewide Contract Vendors will use the VRM system to submit both their quarterly Sales Reports, as well as Administration Fee payments. This new process will affect FY23 Q1 (July 1, 2022 - September 30, 2022) Administration Fee payments.
Revised Deadlines for Sales Reporting
Note that Sales Reporting deadlines will be revised beginning with FY23 Q1 reporting to accommodate the new Administration Fee reporting process. Sales Reports will be due 30 days after the conclusion of the calendar quarter: January 31, April 30, July 31, and October 31.
Administration Fee payment due dates will remain unchanged - 45 days after the conclusion of the calendar quarter: February 15, May 15, August 15, and November 15.
If you have questions, contact the OSD Help Desk at 888-MA-State (627-8283).
Additional Resources
Audit
During the term of the Statewide Contract and for six years following the contract's date, the Operational Services Division, the Office of the Inspector General, or other authorized representatives shall be afforded access at reasonable times to the Statewide Contractor's accounting records, including sales information on any system, reports, or files, so that they may review all records relating to goods sold or services performed pursuant to their agreement with the Commonwealth. If such a review indicates that the Statewide Contractor has materially underpaid OSD, then the Contractor shall remit the underpayment and be responsible for payment of any costs associated with the records review.