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Massachusetts Tax

FULL List to Massachusetts Tax Forms

Individual Income Tax Forms

Form 1 Massachusetts Resident Income Tax Return 

Form 1-NR/PY Mass. Nonresident/Part-Year Resident Tax Return 

Corporate Income Tax Forms

Form 355 Business or Manufacturing Corporation Excise Return 

Form 355S S Corporation Excise Return 

Form 355SBC Small Business Corporation Excise Return

Sales Tax Forms

Exempt Form

Form ST-10 Business Use Tax Return

Form ST-11 Individual Use Tax Return

Form St-9Q Quarterly Sales and Use Tax Return

Form ST-9A Annual Sales and Use Tax Return

Form ST-9SM Monthly Sales and Use Tax Return

Property Tax Forms

Form 128 Application for Abatement of Real or Personal Property Tax

Form 96 Application for Statutory Exemption

Form 2011 Form of List Return of Personal Property

Property Taxes

In general, all property located within the state of Massachusetts is subject to taxes. However, exemptions do exist that are set forth by individual state statutes. Detailed examination as well as timely acquisition of taxes is overseen and facilitated by each local “assessor.” Massachusetts tax is instituted according to the following classifications of property being “residential, open space, commercial, industrial, or personal.” Each year Massachusetts tax terms include that of payments being expected to have been paid in two parts.

The first payment falls on the first of November or rather in the 30 days allotted following Massachusetts tax forms being mailed out. The subsequent installment, then, would occur on the first of May for the next “assessment year.” Despite these norms and specifications attached to Massachusetts tax, a multitude of exemptions do also exist, which we will now familiarize ourselves with.

To begin with, tax exemptions exist with the purpose of allowing certain individuals to be discharged from responsibility for payment of taxes, whether in full or by a certain portion specified. With this in mind, there are four distinct groups or populations that are legally exempt from Massachusetts tax in accordance with property. They include blind individuals, the elderly, surviving spouses or children, and veterans. For each group, applications must be filed each calendar year with the appropriate assessors of the municipality in which their property resides.

This must occur prior to or by the date of December 15th, or within 3 months following the conveyance of Massachusetts tax forms. Keep in mind that such an application does not relieve an individual from regularly scheduled tax payments, however. Relief will not occur until their applications have been, thereafter, approved. Appropriate documentation must also be relinquished depending upon what local assessors require.

Blind Persons

When concerning visually deficient individuals, eligibility requirements consist of “proof of blindness” as well as “ownership and domicile.” Proof concerning individual blindness consists of certification authorized and given by the “Commission for the Blind,” which authenticate and vouch for their condition by law. This is necessary for each year of reapplication as well.

If, however, one is unable to obtain such certification in the first year, they may provide written proof from a creditable physician who may certify the condition of blindness in accordance with the Commission. In terms of domicile, the blind individual must have taken residence in their property as of the first of July of that current Massachusetts tax year. In relations to ownership, one must have established a stake of at least $5,000 in the aforementioned property. Depending upon clauses accepted by their locale, exemption amounts may range from four to five hundred dollars.

The Elderly

When concerning elderly individuals, documentation required by local assessor may be comprised of birth certificates, proof of domicile, and previous income tax returns, but are not necessarily limited to them. In terms of immediate eligibility, the following must be satisfied: age, domicile/ownership, yearly income, and assets. An elderly individual must be at least 70 years of age or be a “joint-owner” of property with a spouse who’s of that age. This must have been viable as of the first of July of that Massachusetts tax year.

They must have owned and resided in the property as of the same prescribed date as well as must have maintained a stake of at least $4,000 in it. Eligibility amounts also vary according to specifications attached to each clause. Marriage versus status as single also incurs varying specifications. For instance, according to “clause 41,” gross monetary considerations aside from social security must be below the plateau of $6,000 if single, and $7,000 if married. “Whole estate” values must also abide by certain specifications. In relation to clauses, exemption amounts equal that of $500 for each.

Surviving Spouses/Children

In reference to surviving spouses and/or children, documentation required by assessors mirrors that of what is expected of elderly applicants. Eligibility requirements consist of the individual needing to have been labeled within the status of being a surviving spouse/child who is the sole owner of property as of July 1 of that Massachusetts tax year. In order to be within such specifications of ownership, one must have a stake of at least $2,000 in the property or must be in agreement with any one or more clause specifications. An example would be that of “Clause 17,” which states that, in relation to whole estate, it not exceed $20,000. Exemptions for this individual group are that of $175.

Veterans

As the final population eligible for Massachusetts property tax exemption, veterans must provide assessors with documentation such as “certificate of service” referencing disability from the “Veterans Administration” in addition to the proof of ownership and domicile. Veterans must satisfy resident requirements comprised of them having lived in the state for six months prior to military service or having lived in the state for at least five years altogether.

One must have resided on the property as of July first of that tax year in order to satisfy the requirement of domicile while ownership consists of them their stake in the property existing within the confines of two to ten thousand dollars. In terms of exemption in connection to the various clauses, they range from a $1,000 to $2,500. An additional specification unique to veterans is that of “total exemption” due to condition as a paraplegic. In such a case, one must have obtained appropriate certification.

“Intangible personal property taxes” are also a part of Massachusetts law. In such a case, the state requires compensation of 5.3 percent of any profits garnered from transactions concerning “capital assets” maintained for more than a year. This must have occurred on or following the first of May, 2002. Collection of 12 percent tax on interest for those transactions for a year or less.

Sales Taxes

Massachusetts tax also reigns over such endeavors as the purchasing of items. Sales tax is a percentage that the state tacks onto the original price of items. An example would be that of 6.25%. All vendors within the state must abide by such specifications of Massachusetts tax law. There are responsible for registration with the DOR, collection of the sales taxes, and the conveyance of them to the DOR accompanied by tax returns. These qualifications are expected of “out-of-state vendors” as well who may be vending in the state at any time.

Many items are, however, also exempt from sales taxes. Examples include clothing totaling less than $175, magazines, and tickets to events. When encountering other goods such as for the home or other apparel, multiple variations occur where aprons may be exempt but shower caps may not. Due to such a complex classification of both taxable and tax-exempt items, it would be wise to inquire prior to going forth with a purchase if concerned with such economic specifications.


Introduction

Taxation is a necessary evil. In a democratic society, taxes are levied to provide basic infrastructure services such as roads, bridges, schools, hospitals, and parks. They are also used to finance social welfare programs for the economically disadvantaged, defense and national security, among other public goods.

Massachusetts is one of the most populous states in the US and has a history of progressive taxation. In this article, we will explore the Massachusetts tax system, its history, current rates, exemptions and deductions, and the challenges and opportunities facing the state.

History of Massachusetts Taxation

Taxation in Massachusetts dates back to the colonial period, when the British imposed various taxes on the colonies, such as the infamous Stamp Act. These taxes were unpopular and led to the American Revolution, which culminated in the Declaration of Independence in 1776.

After independence, Massachusetts levied various taxes to finance the state government. However, it was not until the 20th century that the state adopted a progressive income tax system.

The Massachusetts Constitution of 1917 established a state income tax with a flat rate of 2 percent. This rate remained unchanged until 1966, when it was raised to 3 percent. In 1968, the rate was increased to 4 percent and then to 5 percent in 1988. In 1994, the rate was raised to 5.95 percent and then to 9.1 percent in 2012, which is the current rate.

Massachusetts Tax Rates

The Massachusetts tax rate for individuals is based on their taxable income. Taxable income is calculated by subtracting exemptions, deductions, and credits from gross income. The income tax rate for 2021 is 5 percent, with a maximum rate of 9.1 percent. This rate applies to individuals earning over $1 million annually.

The state also imposes a flat 6.25 percent sales tax on most goods and services. However, some items are exempt from the sales tax, such as food, clothing, and medical supplies.

In addition to the sales tax, Massachusetts also levies a use tax on items purchased outside the state. The use tax rate is the same as the sales tax rate.

Property taxes are assessed by local governments and are based on the value of the property. The state does not impose a property tax, but it does offer property tax relief through a number of programs, such as the Senior Circuit Breaker Tax Credit and the Residential Exemption.

Massachusetts Tax Exemptions and Deductions

Massachusetts offers a number of tax exemptions and deductions to its taxpayers. Some of the most common include:

Personal Exemption: The personal exemption for 2021 is $1,000 per individual or $2,000 per married couple filing jointly. This exemption is available to all taxpayers regardless of their income level.

Dependent Exemption: Taxpayers can claim an exemption for each dependent they support, including children, elderly parents, and disabled relatives.

Standard Deduction: The standard deduction for 2021 is $12,550 for individuals and $25,100 for married couples filing jointly.

Itemized Deductions: Taxpayers can also itemize deductions for certain expenses, such as mortgage interest, charitable contributions, medical expenses, and state and local taxes.

Earned Income Tax Credit (EITC): The EITC is a federal credit for low-income workers. Massachusetts also offers a state EITC, which is equal to 30 percent of the federal credit.

Challenges and Opportunities for Massachusetts Taxation

Massachusetts faces a number of challenges and opportunities when it comes to taxation. Some of the most notable include:

Budget Deficits: Like many states, Massachusetts has faced budget deficits in recent years, which has put pressure on the government to find new sources of revenue. This has led to proposals for new taxes, such as a tax on sugary drinks and a tax on ride-sharing services.

Economic Growth: Massachusetts is known for its high-tech industry and innovation economy, which has driven economic growth in the state. However, this growth has been uneven, with some areas of the state experiencing higher levels of economic disparity than others. The state has implemented various tax policies to support economic growth, such as tax breaks for start-ups and investments in job training and education.

Climate Change: Massachusetts faces significant challenges from climate change, including more frequent and severe storms, rising sea levels, and increasing temperatures. The state has implemented various tax policies to combat climate change, such as a tax on carbon emissions and incentives for renewable energy development.

Equity: Massachusetts has a history of progressive taxation, which has helped to reduce income inequality in the state. However, there are still significant disparities in wealth and income between different groups, such as racial and ethnic minorities and those living in poverty. The state has implemented various tax policies to support equity, such as targeted tax credits for low-income families and efforts to increase access to affordable housing.

Conclusion

Massachusetts has a complex tax system that has evolved over time to address the changing needs of the state. The state has a history of progressive taxation and has implemented various tax policies to support economic growth, combat climate change, and promote equity. However, the state also faces significant challenges, such as budget deficits and disparities in wealth and income. As the state continues to grow and evolve, it will be important to maintain a tax system that is fair, efficient, and supportive of the needs of all its residents.