Unfortunately for people working and living in Massachusetts, the total taxes paid in the New England state are higher than in most other states. The average Massachusetts resident will pay $16,598 a year in taxes, or about 23.39 percent of their annual income, a 2018 GOBankingRates study found. That amount includes not just state income taxes, but federal income taxes, gas taxes, sales taxes and property taxes as well.
Here’s a full breakdown of Massachusetts’ tax rates and how they might affect your bottom line.
|Massachusetts State Taxes|
|Rate Range of Taxes||12.531% to 28.531%|
|Sales Tax Rate Range||6.25%|
|Income Tax Rate Range||5.10%|
|Inheritance and Estate Tax Rate Range||0% to 16%|
|Property Tax Rate Range||1.181%|
Massachusetts State Personal Income Tax
Massachusetts levies a 5.1 percent tax on both earned and unearned income. Earned income includes salaries, wages, tips and commissions, and unearned income includes interest, dividends and capital gains. Certain capital gains are taxed at a higher rate of 12 percent.
The personal income tax rate of 5.1 percent applies to everyone whose Massachusetts gross income is $8,000 or more.
Here’s a look at the Massachusetts income tax brackets:
|Massachusetts Income Tax Rates|
|Income Tax Bracket||Tax Rate|
|$8,000 or more||5.1%|
Find Out: 7 States With No Income Tax
Massachusetts State Sales Tax
|Massachusetts Sales Tax|
|Massachusetts Sales Tax Rate||6.25%|
A 6.25 percent sales tax applies in Massachusetts, but there are no separate local sales taxes in the state.
The sales tax applies to all sales or rentals of tangible personal property, including gas, electricity, steam and certain telecommunications services. Certain items are exempt from sales tax:
- Food (However, food served at a restaurant is taxed.)
- Clothing items costing $175 or less
- Newspapers and magazines
- Admission tickets for activities such as sporting events and amusement parks
- Utilities and heating fuel for residential users, small businesses and certain industrial users
- Telephone services for residential users
- Transportation services
- Professional services (includes accounting, insurance, legal services, medical services, haircuts and car repairs)
Sales Tax by State: Here’s How Much You’re Really Paying
Massachusetts Property Tax
Property taxes are collected by the city or town rather than the state so property tax rates in Massachusetts will vary, but the effective state property tax is 1.181 percent. The county property taxes in Massachusetts currently range from 0.32 percent to 1.65 percent, according to SmartAsset. In Massachusetts, property values are high, so residents will likely have to pay a sizable sum for property taxes regardless of where in the state they live.
Massachusetts Inheritance Tax and Estate Tax
If you’re responsible for the estate of someone who has died, you might need to file an estate tax return. If the estate is worth less than $1 million, you don’t need to file a return or pay an estate tax. If the estate is worth $1 million or more, the tax rate will range from 0.8 percent to 0.16 percent, depending on the value of the adjusted taxable estate. Although Massachusetts has an estate tax, it does not have an inheritance tax.
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