Local Options Taxes

BACKGROUND

The meals tax is a 5 percent tax on meals served in restaurants. A 1 percentage point increase in the meals tax would be worth $123 million.

Since most states, unlike Massachusetts, allow local option sales taxes, the actual effective state and local sales tax rate in Massachusetts is lower than every state with a statewide sales tax except Maryland — which also has a 5 percent state rate and no local option. Alaska does not have a state sales tax, though some local jurisdictions do have sales taxes. Hawaii has a 4 percent state rate, but has a much broader sales tax base than any other state including food sales and many business inputs. [More at Mass Budget]

ADDITIONAL RESOURCES

Massachusetts Budget and Policy Center
- Facts at a Glance: Local Options Taxes

LOCAL OPTIONS TAX NEWS

Meal tax has helped towns financially, including Bedford

The meals tax, a local revenue policy which has provided much relief to cities and towns in hard economic times: As of June, 146 municipalities had adopted a local meals tax, which lawmakers approved...

Jul 31, 2011
Town Council narrowly approves additional meals tax

The [Randolph] Town Councilors’ view on the local options meals tax has shifted. After denying an additional meals tax last year, the Council voted, 5-4, to add an additional 0.75-percent to the...

Apr 19, 2011
Menino’s budget proposes far fewer job cuts than in past

Mayor Thomas M. Menino will unveil a budget today that may be most notable for what it does not include: the threat of big layoffs… But there are still cuts on the table. City workers would be pulled...

Apr 13, 2011
Meals tax brings in more revenue than expected

Communities that have taken the authority offered by the Massachusetts Legislature to impose a meals tax have generally found they are bringing in more revenue than expected. Seventy-three...

Mar 7, 2010
On Taxes: A family getting together and getting active ..........

“I think we need to, as a family, get together and start getting active with the city of Newton,” said Seana Gaherin, an owner of Dunn-Gaherin’s Food and Spirits on Elliot Street in Newton. And...

Sep 15, 2009

Local Options Taxes

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ADDITIONAL RESOURCES

LOCAL OPTIONS TAX NEWS

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