Massachusetts Income Tax Calculator

Massachusetts state tax quick facts State income tax: 5.10% flat rate Sales tax: 6.25% Property tax: 1.20% 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 5.10% 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).

Other taxes collected in Massachusetts include a gas tax, a capital gains tax, local property taxes and an estate tax. Below, we’ll take a deeper look at the rules and rates for each of these taxes.

Massachusetts Income Tax

The income tax rate in Massachusetts is 5.10%. That rate applies equally to all taxable income. Unlike with the federal income tax, there are no tax brackets in Massachusetts. While that makes life a little simpler, it does not necessarily mean Massachusetts taxpayers have smaller tax bills: according to the Tax Foundation, the state’s income tax collections per person were $1,919 in 2016, 4th highest in the country. State residents also have the option to pay a higher income tax rate of 5.85%.

Massachusetts does not have a standard deduction, but 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. If you are looking to get help filing your return, you can look into the best tax software.

In addition to those deductions, taxpayers can claim a personal exemption to lower their taxable income. The table below shows the Massachusetts personal exemption for the 2016 tax year.

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 $100 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 5.10%. 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% of 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 are one of the most significant sources of revenue for local governments in Massachusetts. 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 0.4% up to 1.6%, and the state average effective rate is 1.20%. 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.

Calculate Your Property Taxes: Massachusetts Property Tax Calculator

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

Massachusetts Alcohol Tax

On the other hand, Massachusetts’s taxes on alcohol are some of the lightest in the U.S. According to the Tax Foundation, those taxes total 11 cents per gallon of beer. This is the 7th lowest in the country.

Massachusetts Gas Tax

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

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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.