Professional Services Accounting ARTICLE -
Use Tax Filing
Target Audience: Law Firm Professionals, Interest in Sales and Use Tax, Members of the Commonwealth of Massachusetts
The Massachusetts use tax is a five percent tax on the sales price of tangible personal property on which no sales tax, or a sales tax of less than the five percent Massachusetts rate, was paid and which are to be used, stored or consumed in the Commonwealth. The use tax attempts to mirror the in-state sales tax in order to deal with the taxation of interstate sales made by out-of-state vendors. Unlike the sales tax, which is collected by merchants, the use tax is paid directly to the state by the purchaser.
Typical situations in which a use tax is required is when items are purchased from an out-of-state (or out-of-country) vendor, ordered through a mail-order catalog or over the Internet. Typical purchases subject to use tax include supplies, furniture, equipment, computer, software, books, etc.
Massachusetts and other states are focusing their attention on this area to generate additional revenues. Please be aware that steps should be taken to assess the use tax in order to avoid possible state action. The annual use tax form is due January 20, 2005 for 2004. Please let us know if you need any assistance in this area.
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