The Massachusetts income tax rate is 5.00%. The statewide sales tax rate of 6.25% is among the 20 lowest in the country . Table 1 compares the tax rates and bases for a broad range of Connecticut, Massachusetts, New York, and Rhode Island taxes.
What is not taxed in Massachusetts?
Tangible personal property is taxable in Massachusetts, with a few exceptions. These exceptions include clothing costing less than $175, most non-restaurant food and groceries, several health care and sanitation items, prescribed medical devices, and periodicals.
Most refunds are claimed on an original return and will be issued automatically by the Department. For e-filed returns the turnaround time is about 6 weeks; but for paper returns it could take up to 10 weeks. You must claim your refund or credit within a certain time period, as further detailed below.
Fiscal Year (FY) 2023 Residential Tax Rate: $5.98
It does not include exemptions, deductions, credits, apportionment formulas, and other provisions that could affect the amount of taxes people and businesses must pay. The income tax rate in Massachusetts is 5.00%. That rate applies equally to all taxable income. Unlike with the federal income tax, there are no tax brackets in Massachusetts. State residents who would like to contribute massachusetts income tax more to the state’s coffers also have the option to pay a higher income tax rate. Total state expenditures • State debt • Massachusetts state budget and financesMassachusetts generates the bulk of its tax revenue by levying a personal income tax and a sales tax. The state derives its constitutional authority to tax from Article IV, Chapter 1 of the state constitution.
The Federal income tax also has a standard deduction, personal exemptions, and dependant deductions, though they are different amounts than Massachusetts’ and may have different rules. Notably, many states apply their top rates at income levels far below $1 million . As a result, a larger share of the income of high-income filers in these states is subject to the state’s top rate. With Fair Share in place, Massachusetts filers would pay the 4 percent surtax only on the portion of their income above $1 million. Income below $1 million per year would continue to be taxed at the current, 5 percent rate. With Massachusetts’s upside down tax system, these households currently pay a far smaller share of their income in state and local taxes than low- and middle-income households do. Applying a higher tax rate to very high incomes would help turn our tax system right side up, while advancing efforts to achieve racial equity in Massachusetts.
Massachusetts couples pay the highest…
Applies to business organizations organized as limited liability companies, limited liability partnerships, limited partnerships, and S corporations (i.e., pass-through entities). Other charges, such as filing fees or minimum taxes, may apply.
Any transaction privilege tax collected from residents belongs to the Department of Revenue. As a business owner, it is your responsibility to manange the transaction privilege tax you collect to remain in compliance with state laws and avoid penalties and interest. The rates presented are current for the date and time you submitted the address, but may change at any time with new tax legislation. Other important Massachusetts state tax return information and other related features (e.g. tax extension, amendment, etc.) are listed here as well. Click on the income amounts below to see how much tax you may pay based on the filing status and state entered above.