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Can I collect sales tax from customers in different states without violating tax laws in Massachusetts? What are the requirements?
Requirements for Collecting Sales Tax in Massachusetts and Other States
To collect sales tax from customers in different states without violating tax laws in Massachusetts, you must comply with the sales tax laws of each state where you have customers. This may require registering for a sales tax permit, collecting and remitting sales tax, and filing sales tax returns in each state where you have nexus.
In Massachusetts, vendors engaged in business in the state are required to collect sales tax on taxable sales of tangible personal property or services for storage, use, or other consumption in the state [6.1]. To collect sales tax in Massachusetts, you must register for a sales tax permit with the Massachusetts Department of Revenue (DOR) [6.1]. You can register online through the MassTaxConnect portal or by mail using Form ST-1. Once registered, you will receive a sales tax permit and a sales tax return to file and remit the sales tax you collect [6.1].
If you have customers in other states, you may be required to collect sales tax in those states as well. This depends on the state’s sales tax laws and whether you have a physical presence or nexus in the state. Nexus refers to a connection or presence in the state that triggers a sales tax obligation. Each state has its own rules for determining nexus, but common factors include having a physical location, employees, or property in the state, or making a certain amount of sales or transactions in the state [6.1].
If you have nexus in another state, you must register for a sales tax permit in that state and collect and remit sales tax on taxable sales to customers in that state. You may also be required to file sales tax returns and pay any applicable fees or penalties [6.1].
Conclusion
To collect sales tax from customers in different states without violating tax laws in Massachusetts, you must comply with the sales tax laws of each state where you have customers. This may require registering for a sales tax permit, collecting and remitting sales tax, and filing sales tax returns in each state where you have nexus.
Source(s):
Jurisdiction
Massachusetts