Do You Need to Get a Sales Tax Permit in Massachusetts?

by | Nov 13, 2019

Quick Answer: You need to get a sales tax permit in Massachusetts if you meet economic nexus requirements or have a physical presence in the state. Read on for more detailed information.  

What is Sales Tax Nexus Anyway?

Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit. 

Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors.  Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.  

 

What Should You Do Once You Determine You Have Sales Tax Nexus?

Once you determine that you have sales tax nexus in Massachusetts, your next step is to register for a sales tax permit in the state.  Check out our blog post on getting a sales tax permit in Massachusetts for more information about that process.  If you are not interested in doing the work of getting the permit yourself, TaxValet can handle the permit registration for you with our Sales Tax Permit Registration Service.

 

Common Ways to Have Sales Tax Nexus in Massachusetts

1. Economic nexus in Massachusetts

If you make $100,000 of sales in Massachusetts annually, then you are required to register for, collect, and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in  Massachusetts. Nexus has been created based on your volume of sales. 

For more information, please see 830-CMR-64h17, General Rule.

If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.

2. Physical presence nexus in Massachusetts

The following creates a physical presence nexus in Massachusetts. If you have any of the following in Massachusetts, you will need to get a sales tax permit:

  1. An office, place of business, or any owned property.
  2. An employee present in the commonwealth for more than 2 days per year.
  3. Goods in a warehouse.
  4. Ownership of real or personal property.
  5. A sample or display area, such as a trade show exhibit.
  6. Delivery of property or performance of service in Massachusetts.

For more information about physical nexus in Massachusetts, see the Massachusetts Sales and Use Tax Guide – Sales and Use Tax Vendors.

If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.

Free State Audit Risk Guide

See which states pose the greatest risk to your business.

State-by-State Audit Risk Percentages

Do You Need a Sales Tax Permit in Massachusetts If You Only Sell on Marketplaces?

If you are an online retailer who ONLY sells on approved marketplaces (such as Amazon, eBay, etc), Massachusetts sales tax will be remitted by the marketplace and you are NOT required to get a sales tax permit. 

For more information about marketplace sellers in Massachusetts, see Bill S.1637.

If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, check out our Sales Tax Starter Kit service.

Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.

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