Starting with the January 2022 period (return due on March 2, 2022) there will be new lines on MassTaxConnect returns for taxpayers who collect and pay sales/use tax, including sales tax on services and meals, marijuana retail taxes, or room occupancy excise. In this email, we are providing screenshots for your review to illustrate the line changes in MassTaxConnect.
The following information is also available on the New 2022 Trustee Tax Return Lines page.
SALES TAX ON MEALS RETURN
New lines will be added to the Sales Tax on Meals return (Form ST-MAB-4). Taxpayers will be asked to break out cash versus credit sales when reporting gross sales on the Sales Tax on Meals return. DOR recognizes that some taxpayers may need additional time to implement this change. Therefore, DOR will allow taxpayers to estimate the amount of their cash sales versus credit sales until the close of the June 2022 period. See Frequently Asked Questions for more information on the cash-versus-credit line items on the Sales Tax on Meals Return. Taxpayers will no longer be required to break out alcohol sales separately. Additionally, you will be asked to provide information on your POS (point of sale) system. A pull-down menu will be available. If you do not use a POS system, you will be asked to select how you capture sales information. The POS list and further instructions will be posted on the website.
Specifications for bulk filing sales tax on meals were updated to include the changes on reporting cash-versus-credit sales and reporting on point-of-sale systems in the guide DOR Bulk File Instructions for Businesses.
Monthly taxpayers who pay sales/use tax, including sales tax on services and meals, marijuana retail taxes, or room occupancy excise, who had more than $150,000 in total tax liability in the previous calendar year, are required to make an advance payment as of April 2021. The advance payment is made up of tax collected from either (1) the 1st through the 21st day of the month or, and this is new, (2) at least 80% of the prior month’s liability. It must be paid by the 25th of the month.
Although not all taxpayers who file these returns are subject to the advance payment requirement, the 2022 returns for these tax types will include new lines that will reflect the amount of tax previously paid for the period for all taxpayers. Below is a screenshot from the updated Sales and Use Tax return (ST-9) showing the new line items. The line numbers will differ depending on what return is being filed, but the line information will be consistent with the changes below.
Self-assessed advance payment penalty
Any taxpayer who is subject to the advance payment requirement who pays less than the full amount of the advance payment due by the 25th of the month may be subject to a 5% penalty on the underpayment amount only. The advance payment must be equal to the lesser of your actual tax liability through the 21st of the month or at least 80% of the prior month’s total liability. The taxpayer will not be subject to the penalty if 70% or more of the total tax liability for the month is remitted by the 25th day of the month. A worksheet is available to help you determine if you are responsible for the underpayment penalty and to help with the calculation. Although not all taxpayers are subject to the advance payment requirement, the 2022 returns will include a new line called Advance payment penalty where taxpayers who meet the requirements can report this penalty. Again, the line changes will differ by return.
SALES AND USE TAX ON TELECOMMUNICATIONS SERVICES RETURN
The Sales Tax Services Form (STS) will have a new line item capturing the tax due on purchases subject to use tax reported on this return. It will closely resemble how the information is captured on the Sales and Use Tax Return (Form ST-9) to assist in the calculation of any use tax liability.