Beginning in April 2021, certain vendors collecting Massachusetts sales and use tax (along with certain other taxes) will be required to make an advance payment prior to the tax return due date.
This change applies to tax returns filed for the following tax types:
- Sales/use tax
- Sales tax on services
- Meals tax
- Room occupancy excise
- Marijuana retail taxes
The requirement to make the advance payment depends on the amount of tax or excise liability owed by the business from the previous calendar year. If a vendor or operator’s cumulative tax liability was equal to or below $150,000 in the immediately preceding calendar year, no prepayment is required on the 25th. Full payment is due with the return on the 30th day after the end of monthly filing period.
If the vendor or operator’s cumulative tax liability was more than $150,000 in the immediately preceding calendar year, advance payment of tax collected through and including the 21st day of the month is due on the 25th of the monthly filing period. Payment of the remaining amount is due with the return on the 30th day after the end of monthly filing period. The $150,000 threshold for advance payments will be determined separately for each type of affected return filed by the taxpayer.
This requirement will begin for tax periods ending after April 1, 2021. If you have questions about whether or not your business falls under this new regulation, or for help in determining your threshold eligibility, please contact Gray, Gray & Gray at (781) 407-0300.