Massachusetts Income Tax Calculator

Taxes in Massachusetts

Massachusetts State Tax Quick Facts

• State income tax: 5.05% flat rate
• Sales tax: 6.25%
• Property tax: 1.22% average effective rate
• Gas tax: 26.54 cents per gallon

Boston Harbor may be the site of the most famous tax protest in history, but today Bay Staters pay taxes on a lot more than tea. The most significant taxes in Massachusetts are the sales and income taxes, both of which consist of a flat rate paid by residents statewide. The Massachusetts income tax rate of 5.05% is higher than all but one of the other eight states that levies a flat income tax. The statewide sales tax rate of 6.25% is among the 20 lowest in the country (when including the local taxes collected in many other states).

A financial advisor in Massachusetts can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.

Massachusetts Income Taxes

The income tax rate in Massachusetts is 5.05%. That rate applies equally to all taxable income. Unlike with the federal income tax, there are no tax brackets in Massachusetts. State residents who would like to contribute more to the state’s coffers also have the option to pay a higher income tax rate. Few taxpayers choose to do so.

Massachusetts does not have a standard deduction, but it allows many of the same itemized deductions as the federal government, as well as some additional ones. For example, taxpayers can make deductions for child care expenses, college tuition (if it exceeds 25% of Massachusetts adjusted gross income), certain commuter costs, rental payments (50% of rent up to $3,000) and student loan interest payments.

In addition to those deductions, taxpayers can claim a personal exemption to lower their taxable income.

Residents of Massachusetts are also subject to a penalty if they do not have health insurance coverage, which is paid through their tax return. There is a three-month grace period for health coverage lapses, after which the penalty accumulates on a monthly basis, up to about $119 per month. The total penalty depends on income.

Massachusetts Capital Gains Tax

Capital gains in Massachusetts are taxed at one of two rates. Most long-term capital gains, as well as interest and dividend income, are taxed at the standard income tax rate of 5.05%. Capital gains in those categories are included as taxable income on the Massachusetts income tax return. Short-term capital gains, which are realized in less than a year, are taxed at a rate of 12%, as are long-term gains on the sales of collectibles.

Massachusetts Sales Tax

The state sales tax rate in Massachusetts is 6.25%. There are no additional local taxes collected, so 6.25% is the rate you will pay regardless of where you are in the state. The tax is on the purchase or use of “tangible personal property.” This includes nearly any purchasable good, with some exceptions.

Most food sold in grocery stores is exempt from sales tax entirely. Clothing purchases, including shoes, jackets and even costumes, are exempt up to $175. A product that costs more than $175 is taxable above that amount, so a $200 pair of shoes would be taxed at 6.25% on the $25 above the exemption limit. Other exempt items include newspapers, admissions tickets (i.e. to movies or sporting events), professional or personal services and most health care products.

Massachusetts Property Tax

Property taxes in Massachusetts are one of the most significant sources of revenue for local governments. In some counties, average property taxes paid exceed $4,000 per year. Effective property tax rates (taxes paid as a percentage of market value) range from less than 0.31% up to 1.68%, and the state average effective rate is 1.22%. That’s the 18th-highest rate in the country.

If you are planning on refinancing or getting a home loan in Massachusetts, take a look at our Massachusetts mortgage rates guide.

Massachusetts Estate Tax

Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $1 million. If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed. However, estate tax is only due if the taxable estate (after deductions) exceeds $1 million.

Massachusetts Cigarette Tax

Massachusetts has the fifth highest cigarette taxes in the nation. The tax is $3.51 per pack of 20, which puts the final price of cigarettes in Massachusetts at around $10.00 per pack.

Massachusetts Alcohol Tax

On the other hand, Massachusetts’ taxes on alcohol are some of the lightest in the U.S. These taxes are 11 cents per gallon beer, 55 cents per gallon of wine and $4.05 per gallon of liquor.

Massachusetts Gas Tax

Gasoline and diesel taxes total 26.54 cents per gallon. That includes taxes and fees.

• Plymouth, Massachusetts was founded by pilgrims who were aboard the ship the Mayflower in 1620.
• While Massachusetts is the seventh smallest state in the U.S. by area, it is the 15th largest state by population.
• Harvard University, founded in Boston in 1636, is the oldest institution of higher education in the U.S.