NESFA^® Treasury Procedures: Massachusetts Sales Tax

NESFA collects Massachusetts Sales Tax on all book and other merchandise sales sent to addresses in Massachusetts, or where the transaction takes place in Massachusetts (such as at a convention).  The rate is 6.25%.  It is collected on books, but not on memberships, dues, or t-shirts. 

NESFA is required to track taxable sales and we do this by being meticulous in charging and recording tax on all taxable sales.  By doing this carefully and accurately, we can compute total taxable sales by multiplying the sales tax collected by 16.

When sales tax is collected, it is put into the LI-MA Sales Tax account.  (If a sale is taxable and tax was not collected, or insufficient tax was collected, due to error or oversight, NESFA absorbs the cost.  Compute the tax that should have been collected and credit it to the LI-MA Sales Tax account, and balance that with a debit to the SE-Misc account.)

A sales tax return must be done and mailed monthly by the 20th day of the following month.  (The January sales tax return must be filed by Feb 20th.)

To fill out the sales tax return:

1. Set the current month to the month in question.
2. Run and print the report Reports > Financial Statements > Sales income for current month to get total sales for NESFA Press items.
3. Run and print Reports > General Ledger > General Ledger #3a for for the current month for account IN-Library in order to get the income for used books. 
4. Add the two numbers obtained above together to get the total sales — (Perhaps dues income should also be gotten from account IN-Dues).
5. Run and print the report Reports > General Ledger > This Period's sales tax to get the sales tax collected.
6. Compute total taxable sales by multiplying the month's sales tax collected by 16.
7. Fill out Massachusetts form ST-9.  Use the form which can be found at the Mass. DOR website. There should also be several copies in the file cabinet in the folder marked "Sales Tax".  The month for which the taxes are being paid should be entered onto the form as mm/yyyy, and our account number 237-134-890*08* should be entered into the appropriate box.  The correct numbers for the form can be determined by using the Excel spreadsheet N:\Treasurer\Forms\Sales-Tax-ST-9.xls.
8. Write a check using payee (vendor) MA DoR. (The vendors MA Atty. Gen. and MA Board of Ed. are for paying the state for things other than sales tax.)
9. Make a copy of it all, attach the two reports you printed, save the copies and mail the form and check.
10. N.B.  Even if the amount of tax due is zero, the form needs to be filled out and mailed.