Sales Tax
- Statewide: 6.25%
- Counties cannot levy an additional sales tax.
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: Exempt
- Prepared Foods: 7%
- Clothing: Single items exempt if under $175
- Gasoline Tax: 45.87 cents/gallon (Includes all state, local, and federal taxes)
- Diesel Fuel Tax: 51.87 cents/gallon (Includes all state, local, and federal taxes)
Personal Income Tax
- Personal Income Tax Rate: 5.0% (9% if income over $1,083,150)
- Standard deduction: None
- Personal Exemption Allowance: $4,400. Dependent Exemption: $1,000/65 or Over: Additional $700.
- Itemized Deductions Allowed? Yes, subject to limitations
- Retirement Income
- Social Security: Exempt
- IRAs: Portion on which Massachusetts tax was previously paid not taxable
- 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates
- Private pensions: Taxable at ordinary income tax rates
- Public Pensions: Exempt
- Military Pay
- Active Duty Pay: Taxable to the extent included in federal Adjusted Gross Income
- Military Retirement Pay: Exempt
- Military Disability Pay: Exempt
- VA Disability Dependency & Indemnity Compensation Benefits: Exempt
- SBP/SSBP/RCSBP/RSFPP: Exempt
Income Tax Comments: State allows county- and city-level income tax.
Property Tax
- Local municipalities average 1.11% of the property's assessed value.
- Calculation of assessed value: 100% of fair market value; reappraised annually
- Relief programs for:
- Senior Circuit Breaker Tax Credit: Available if tax exceeds 10% of income plus water and sewer expenses, and meet income requirements. Max credit is $2,730.
- Disabled Veterans/Surviving Spouses/Gold Star Parents: Tax credit based on service-linked disability percentage. Full exemptions available. Additional abatement or reduction in taxable value available.
- Work-Off: Volunteers over 60 can work off some of their property tax liability. Not available in all municipalities.
- Personal Property Tax: Yes. Rates and exemptions vary.
- Deferral programs are also available.
Inheritance & Estate Taxes: Estates over $2 million (retroactive to 2023) are taxed using a maximum federal credit for state death taxes plus a percentage of any amount exceeding that credit with a maximum rate of 16%. For estates of decedents dying on or after Jan. 2, 2023, there is a state tax credit of $99,600. Estates left to spouses are tax-free, and there is an unlimited charitable deduction. There is no inheritance tax.
Department of Revenue Website: www.mass.gov/orgs/massachusetts-department-of-revenue
