Understanding the “use tax”

The state expects you to keep track of all of those purchases and submit for taxation

NORTHAMPTON, Mass. (WWLP) – Many people will be breaking the law when they file their taxes this year. 22News is working to explain the “use tax” in Massachusetts and what it means.

If you buy something in a state like New Hampshire that doesn’t charge you sales tax and you bring it back to Massachusetts to “use”, you owe the state of Massachusetts sales tax on that item. The same goes for purchases made in a state where the sales tax is less than the Massachusetts rate of 6.25%.

The use tax also applies to electronic purchases made online, over the phone or on a TV shopping network, where they don’t charge sales tax. The state expects you to keep track of all of those purchases and submit for taxation when you file your taxes every year. It’s something most people don’t do and never knew about.

Mia Ramos of Springfield told 22News, “No, I didn’t know about it. I feel a little confused, because obviously I wasn’t informed right and I think it have to go back and redo my taxes maybe.”

“I ordered thousands of dollars of things online and out of state so where does that leave me. So if they come after me for liability. It’s not my fault,” said Shaelia Rivera of Holyoke.

Some items, including clothing purchases under $175 are exempt from the state’s “use tax.” In the 2012 tax year, about $3.5 million in use tax was collected…residents owed an estimated $200 million.

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