Massachusetts State Tax: Overview
Massachusetts has a flat personal income tax rate of 5% of federal adjusted gross income. Beginning in 2023, an additional 4% tax is imposed on income over $1 million. Property taxes in Massachusetts are relatively high and the commonwealth has an estate tax as well. But sales taxes in Massachusetts are relatively low.
Massachusetts Income Taxes
Massachusetts has a flat rate of 5% of federal adjusted gross income. (Note: On November 8, 2022, Massachusetts voters approved a constitutional amendment to add an additional 4% tax on taxable income over $1 million starting in 2023.)
- Social Security benefits are not taxed by Massachusetts.
- Income from the contributory federal government, Massachusetts state, and Massachusetts local government retirement plans is exempt. Income from noncontributory military retirement plans is also exempt. In addition, a deduction is available for contributory pension income from other state or local governments that do not tax Massachusetts public pensions.
- Railroad Retirement benefits are also exempt.
Massachusetts Sales Tax
Massachusetts has a 6.25% state-level sales tax. There are no local sales taxes.
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- Groceries: Exempt
- Clothing: Exempt if under $175
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
What are Property Taxes in Massachusetts?
In Massachusetts, average property taxes are paid about 1.14% of assessed home value, according to the Tax Foundation.
Massachusetts Property Tax Breaks for Retirees
Massachusetts homeowners and renters who are 65 or older may qualify to claim a refundable "circuit breaker" tax credit on their state income taxes to offset real estate taxes or rent paid during the year on their principal home.
Massachusetts Gas (Motor Fuel) Taxes
Gasoline: 24 cents per gallon.
Diesel: 24 cents per gallon.
Massachusetts Taxes on Alchohol and Tobacco
Cigarettes and little cigars: $3.51 per pack of 20
Snuff: 210% of the wholesale price
Chewing tobacco: 210% of the wholesale price
Other tobacco products: 40% of the wholesale price
Vapor products: 75% of the wholesale price
Source: Massachusetts Department of Revenue
Beer: An excise tax of $0.11 per gallon in 2022.
Wine: $0.55 per gallon
Liquor: $4.05 per gallon
Alcohol sales are exempt from sales tax.
Source: Massachusetts Department of Revenue
Marijuana: 10.75% excise tax; up to 3% local option taxes may also be due. the 6.25% Massachusetts sales tax also applies. There is no excise tax on medical marijuana sales in Massachusetts.
Massachusetts Estate and Inheritance Taxes
- Estates valued at more than $1 million may be subject to a Massachusetts estate tax. Tax rates range from 0.8% to 16%.
- There is an unlimited marital deduction for property left to a surviving spouse and an unlimited charitable deduction for property left to a qualified charity.
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