Massachusetts Sales Tax Filing Update October 2019
What's changing in Massachusetts?
Massachusetts has passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective October 1, 2019.
- Amazon, eBay, Etsy and Walmart began this collection on October 1, 2019.
- You can view the state's guidance document here.
How does this affect me?
If you sell through a Marketplace that has agreed to begin collection in this state, you'll see sales tax collected in, for sales on and after October 1, 2019 on your TaxJar Dashboard and on your Massachusetts Transactions page.
- If you have never set up a filing frequency for Massachusetts in your account's State Settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected there. (We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.)
- If you are currently opted in to receive email reminders for your sales tax due dates, you'll also see Massachusetts listed as a state where you have an upcoming monthly return due in those emails.
I've never registered for a Massachusetts license. Do I need to register for a sales tax license in Massachusetts now?
Yes. If you are a retailer with a physical presence in Massachusetts or you are a remote seller who has crossed the economic nexus threshold for Massachusetts ($100,000/year in gross revenue, or more than 100 separate sales transactions in Massachusetts in the previous or current calendar year), then you will need to register for a Massachusetts sales tax license.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that creates nexus in Massachusetts, you won't need to register for a sales tax license in this state.
I have already registered for a license in Massachusetts and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
If you are a marketplace seller who has already registered due to physical presence (such as inventory stored in your Marketplace's warehouse) or you have voluntarily registered, you should remain registered, according to the DOR.
Do I need to collect taxes on my Massachusetts sales on other platforms?
Yes. If you have nexus in the state (physical or economic) and you make sales to customers in Massachusetts on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Massachusetts orders that are processed on the other platforms.
Do I still need to file returns in Massachusetts?
Yes. Once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns.
- As stated here, please note that if you are required to register with DOR and you have no taxable sales, you must file an annual return reporting zero tax due.
I still need to file returns in Massachusetts. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
When you file, you'll include your Marketplace Sales in Gross Sales.
- Then, you'll enter Gross Sales from your TaxJar Report on line 1 (Gross Sales) on your tax return.
- Enter your Marketplace Sales as a deduction on line 2 (Sales for Resale/Exempt Sales or Other Adjustments).
If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
- If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for Massachusetts, our system will handle the Marketplace sales deduction process automatically.
How does this affect my TaxJar Report for Massachusetts?
Your Massachusetts Sales Tax Report will be updated in early November 2019 (when returns for sales after October 1, 2019 are due) to specifically reflect sales that had tax collected and remitted by Marketplaces that are supported as Marketplace Facilitators in TaxJar Reports.
- These changes will be similar to the Report updates for other states where the Marketplace Facilitator collects tax automatically.