Tax Article - Recent Changes to Sales and Use Tax in Massachusetts
Drop Shipment Provisions
When tangible personal property is delivered by a manufacturer to the ultimate purchaser residing in the Commonwealth, pursuant to a retail sale made by a vendor not engaged in business in the Commonwealth, then the manufacturer shall include the retail selling price in its gross receipts, regardless of any contrary statutory or contractual terms concerning the passage of title or risk of loss.
Renewal Period for Charitable Certificate of Exemption
The renewal period for a Certificate of Exemption (to qualify for the sales and use tax exemption) has been extended from 5 years to 10 years.
Goods Purchased Out of State and Significantly Altered and Brought Into The State
Previously when goods were purchased out of state and significantly altered before being brought into the Commonwealth, the use tax did not apply. However, the Statute now explicitly provides that use tax is due on goods manufactured, fabricated or assembled from materials acquired either within or outside the Commonwealth for storage, use or other consumption within the Commonwealth.
Use Tax Reporting Options
A recent amendment will now permit taxpayers, to use a schedule, to self-report a "safe harbor" amount of use tax based on their MA adjusted gross income. Individual taxpayers electing to report use tax under this method will not be assessed additional use tax on audit with regards to items having a sales price below $1,000 even if the actual amount of use tax due would have been greater than the amount from the schedule Purchases of items having a sales price of $1,000 or more are excluded from the safe harbor.
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