A notice from the Department of Revenue
As part of the fiscal 2010 budget, a provision has been enacted that gives cities and towns the option to impose a local option tax of .75% on sales of prepared meals by establishments in their jurisdiction. Another provision of the fiscal 2010 budget allows communities to increase the rate of the local option room occupancy tax to 6%. These provisions are in MGL Chapter 64L and Chapter 64G respectively. See Technical Information Release (TIR) 09-13 for additional information about recent changes to local option taxes at www.mass.gov/dor.
The Department of Revenue will be sending notices to establishments registered in the DOR system as tax type meals in the middle of December. To aid in the notification you are encouraged to share this notice with the establishments in your community and the local chamber of commerce.
Local option meals tax .75% effective January 1, 2011
Local option rooms tax rate change to 6% effective January 1, 2011
Information for Vendors
In addition to filing returns, DOR requires that every sales check issued by a vendor of meals subject to tax must state separately the charge for the meal and the tax. The amounts of state and local taxes on meals may but are not required to be shown as separate line items. If the state and local tax are combined, the sales check should describe that line as "state and local tax," or the menu should contain a notation that state tax of 6.25% and local tax of .75%, totaling 7% are added to the total price of the meal. For restaurant sales of alcoholic beverages for on-premises consumption sold without a meal, the tax collected need not be stated separately.
As a meals tax vendor, you are required to register with DOR each and every separate location where meals are served to ensure that sales are properly sourced to each community that adopts the local option meals tax. On and after October 1, 2009, vendors with multiple locations in Massachusetts that had previously filed their sales tax on meals returns on a consolidated basis will be required to break out their sales by each location. Caterers, restaurant meal delivery companies, and transient meals tax vendors should consult TIR 09-13 for specific rules sourcing their sales and registration requirements.
Chapter 62C, § 21, has also been amended to permit the Department to disclose to the cities and towns any information necessary for administration of the local option tax imposed pursuant to section 3A of chapter 64G (local option rooms) and chapter 64L (local option meals).
A complete list of communities that have adopted the local option meals tax can be found at: http://www.mass.gov/Ador/docs/dls/mdmstuf/LocalOptions/LOMeals.xls and the complete list of communities that have adopted the local option room occupancy tax is available at: http://www.mass.gov/Ador/docs/dls/mdmstuf/LocalOptions/roomstax.xls.
Thank you in advance for your cooperation. If you have any questions concerning the local option sales tax on meals, please visit DOR’s website at www.mass.gov/dor for a list of frequently asked questions or contact DOR Customer Service at 617-887-6367 or toll-free in MA at 1-800-392-6089.