Massachusetts Enacts Provision for Accelerated Sales Tax Remittance

On December 11, 2020, Massachusetts Gov. Charlie Baker signed the Fiscal Year 2021 budget into law, which contains a provision for accelerated sales tax remittance. Effective April 1, 2021, businesses that have collected and remitted more than $150,000 in sales tax or room occupancy and meals tax in the preceding calendar year will be required to remit tax collections through the twenty-first day of the month no later than the twenty-fifth day of the same month. The accelerated remittance timeline will not apply to businesses with less than $150,000 in sales tax or room occupancy and meals tax in the preceding calendar year. A 5% penalty of the amount of an underpayment will be imposed unless the underpayment is due to a reasonable cause. A penalty will not be imposed if the payment made on or before the twenty-fifth day of the same month is not less than 70% of the total tax collected during the filing period. Businesses that have collected and remitted more than $150,000 in Massachusetts sales tax or room occupancy and meals tax in the preceding calendar year in 2020 will want to put a system in place prior to April 2021 to ensure they are able to timely file and remit the accelerated sales tax payments. (H.B. 5164; Press Release, Office of Governor Charlie Baker and Lt. Governor Karyn Polito, December 11, 2020)

Posted on December 18, 2020