Member Login
Search

 

February 17, 2021

 

MA DOR Draft Guidance on Upcoming Sales/Meals Tax Changes:  
Early Remittance for Many Coming Due April 25th

 

The MA Department of Revenue (DOR) has released its initial guidance, a Working Draft Technical Information Release (TIR), regarding the recent tax changes included in last year’s state budget, including the acceleration of the remittance of sales, use, meals, and room occupancy taxes and the new filing due date for these taxes.  All RAM members are urged to closely review the new requirements, which will require many members to make two payments in April – the regular remittance for the month of March and an advanced April payment for the first 21 days of sales.
 
As you know, RAM has been at the center of the fight on issues related to the remittance of sales tax since Governor Baker first proposed a switch to “Real Time” sales tax collection four years ago.  While we have been successful so far in repeatedly defeating the extremely costly “Real Time” sales tax proposals, the issue has raised awareness of the prevalence of prepayment requirements in many other sales tax states.  As prepayment, or the acceleration of sales tax, advanced as a policy proposal here in the Commonwealth, RAM has sought to simplify or streamline the process and minimize the impact on smaller sellers.  We continue to seek additional flexibility through further legislative changes and with the DOR. 

 
As the new requirements are to take effect on April 1, 2021, the DOR is moving forward with implementation.  The changes include:
 

  • Effective April 1, 2021, certain vendors, including marketplace facilitators, and operators, including intermediaries, must remit on or before the 25th day of the filing period any tax collected on or before the 21st day of the filing period.  (For purposes of the sales and use tax, “tax collected” is equal to gross receipts from taxable sales, including sales for services and meals, from the first day of the filing period through and including the 21st day of the filing period multiplied by the applicable tax rate, e.g., 6.25%; plus local tax on meals, if applicable).
  • The accelerated payment requirement does NOT apply to vendors whose cumulative MA sales and use tax liability in the immediately preceding calendar year is equal to or less than $150,000.

 

RAM has argued and continues to argue for a “safe harbor” provision, similar to what exists in all other prepayment states, that would eliminate the administrative burden of forcing vendors to close the books mid-month by allowing vendors to remit an estimated advanced payment of tax based off of some percentage of the tax liability for the same month of the preceding calendar year (i.e., 75% of the total liability for April 2020.)
 
The additional change in law implemented by the TIR is the change in the due date for the filing of sales tax returns.  Effective for tax periods beginning on or after April 1, 2021, sales and use tax returns will be due within 30 days after the close of the tax period – an additional 10 days later than the current requirement for returns due within 20 days after the close of the tax period.  For the April 2021 monthly tax period, returns will be due on or before May 30, 2021. 

 
The TIR is now open for public comment through March 5, 2021, with email comments accepted by the DOR at [email protected]. 
 
If you have any questions or comments on this issue please contact RAM’s Vice President, Bill Rennie, at [email protected], or (617) 523-1900 ext. 110.
 

Next up in Vaccine Phase 2 - Individuals Ages 65+, Individuals with 2+ Certain Medical Conditions to Begin February 18th

 

Today, the Baker-Polito Administration announced individuals ages 65 and over and those with 2+ certain medical conditions, including Asthma, can visit www.mass.gov/covidvaccine to start booking an appointment for vaccine beginning tomorrow, February 18th.  MA is currently in Phase 2 of the vaccine rollout, with Group 2 becoming eligible with today’s announcement.  From the state’s website, listed in order of priority:

Not yet eligible

  • Group 3: Other workers, including:
    • Early education/daycare, K-12, transit, grocery, utility, food and agriculture, restaurant and cafe workers;
    • Employees across the food, beverages, agriculture, consumer goods, retail, and foodservice sectors;
    • More…