Massachusetts Income Tax Calculator

Taxes in Massachusetts

Massachusetts State Tax Quick Facts

• State income tax: 5.00% flat rate, 4% surtax on income over $1 million
• Sales tax: 6.25%
• Property tax: 1.15% effective rate
• Gas tax: 27.4 cents per gallon of regular gasoline

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 is 5.00%. While the state sales tax of 6.25% is among the nation's highest, there are no local sales taxes levied in Massachusetts. 

A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Massachusetts Income Taxes

The income tax rate in Massachusetts is 5.00%. That rate applies equally to all taxable income up to $1 million. As mentioned above, incomes that exceed this threshold are subject to a 4% surtax that was first instituted in 2023. State residents who would like to contribute more to the state’s coffers also have the option to pay a higher income tax rate. Few taxpayers choose to do so.

Massachusetts does not have a standard deduction, but it 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 $4,000) and student loan interest payments.

In addition to those deductions, taxpayers can claim a personal exemption to lower their taxable income.

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 $175 per month. The total penalty depends on income and only apply to individuals with incomes more than 150% of the federal poverty level. 

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 5.00%. 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 8.5%, 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% on the $25 above the exemption limit. Other exempt items include periodicals, admissions tickets (i.e. to movies or sporting events), professional or personal services and most health care products.

Massachusetts Property Tax

Property taxes in Massachusetts are one of the most significant sources of revenue for local governments. In some counties, median property taxes paid exceed $6,000 per year. The median property tax bill in the state is $5,584 – one of the highest 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.

Massachusetts Estate Tax

Massachusetts has its own estate tax, which applies to any estate above the exclusion amount of $2 million. If the estate has a gross value (before any deductions) over that level, a Massachusetts estate tax return must be filed. Estate tax rates range from 0.8% to 16%. 

Massachusetts Cigarette Tax

Massachusetts has some of the highest cigarette taxes in the nation. The tax is $3.51 per pack of 20, which puts the average price of cigarettes in Massachusetts at around $9 per pack.

Massachusetts Alcohol Tax

Massachusetts taxes alcohol at varying rates: 11 cents per gallon of beer and $4.05 per gallon of liquor (including sales tax and other fees).

Massachusetts Gas Tax

Gasoline taxes in Massachusetts add up to 27.4 cents per gallon.

• 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 16th largest state by population.
• Harvard University, founded in Boston in 1636, is the oldest institution of higher education in the U.S.