Massachusetts Sales Tax Certificate
A seller’s permit is commonly known as a sales tax permit, reseller permit, resale certificate, sales tax exemption certificate, sales tax license or sales and use tax permit. In the state of Massachusetts it is formally referred to as a sales and use tax registration license. This license will furnish a business with a unique Massachusetts sales tax number, otherwise referred to as a Massachusetts Tax ID number. It is essential to know that obtaining this license is one of the first steps a business owner should take when starting a business. As the task of collecting sales tax falls on the business that makes the sales and not the consumer, any failure to remit sales tax may lead to interest charges, fines and/or criminal charges.
DO I NEED A SALES TAX PERMIT IN MASSACHUSETTS?
You need to get a sales tax permit and comply with sales tax laws if you have nexus or a connection to the state of Massachusetts. Nexus can be triggered by either physical or economic presence.
MASSACHUSETTS SALES TAX NEXUS:
You will have to comply with the state of Massachusetts’s individual sales tax laws and apply for a seller’s permit if:
- The business’s primary location (online store, storefront, office etc.) where it conducts operations is located within Massachusetts
- The ownership or staff of the business (including sales people, contractors or agents) enter Massachusetts to conduct business activities
- Personal property owned or leased in Massachusetts is warehoused
- You sell taxable products or services in Massachusetts from out of State (remote sellers that sell in Massachusetts and meet economic nexus thresholds)
- You sell products for shipment within Massachusetts
- You want to hire employees or contractors in Massachusetts
- You own a wholesale company that sells products for resale use in Massachusetts (in most wholesale trade shows and markets it will be required to present a copy of your Massachusetts resale certificate in order to participate)
The examples above establish the connection (nexus) between the state and the seller. This allows the state to impose a sales tax collection obligation on the seller.
Additionally, as of June 2018, the Supreme Court of the Unites States ruled that nexus can also be established by an entity conducting economic activity in a state. This is what is known as remote seller nexus. If a remote seller has above a certain amount of sales volume and/or transactions in another state, they are required to register for sales tax. This means that all online sellers on marketplaces (Amazon, Sears, Walmart, Etsy, Big Commerce, Shopify, eBay etc.) may have to potentially collect and pay sales tax.
MASSACHUSETTS RESALE CERTIFICATE
Another closely related permit is a Massachusetts resale certificate -also known as a sales tax exemption certificate- which grants your business the benefit of being able to buy goods without paying local sales tax on them. When doing this, you are the primary party responsible for collecting the tax from the customer when you sell the item. To complete the ST-4 sales tax resale certificate form, you will need to provide your MA Account ID Number.
HOW TO GET A SELLER’S PERMIT IN MASSACHUSETTS
You can either fill out a paper application and file it in person or you can simply submit an online application. It is strongly recommended that all new businesses file for their sales tax permits through an online tax registration application as it is the easiest and fastest way to apply. For the fastest processing time, please have the following information ready to complete the online application for a Massachusetts Sales Tax Number:
Business name, physical/ mailing address & phone number
A short description of the business
The owner or officer’s Information
MASSACHUSETTS SALES TAX LICENSE APPLICATION
Register for a Massachusetts Sales and Use tax Certificate Online by filling out and submitting the “State Sales Tax Registration” form. This certificate will furnish your business with a unique sales tax number (Massachusetts Sales Tax ID Number). Once you complete the online process, you will receive a confirmation with all relevant important information within 1-2 business days. Shortly after that, you will receive your documents directly from the Massachusetts Department of Revenue and your Mass Tax Connect (MassTaxConnect) account will be ready for future use.