Collecting Sales Tax on Farm Products
This page gives an overview of how to collect sales tax on farm products sold at farm stores or farmers’ markets in Massachusetts. Note that sales tax laws (rates, tax-exempt items, etc.) are different in each state. This guide is designed to help farmers ensure that they are adhering to applicable laws, but it is not a legal document and is not exhaustive; for more detailed information on collecting sales tax in Massachusetts, see this guide to sales and use tax.
Sales tax rates
The regular Massachusetts sales tax is currently 6.25% of the purchase price. Sales tax on meals is also 6.25%, but in about half of the towns in our region (see list here) there is also an additional 0.75% local tax on meals.
Who has to collect sales tax?
While many of the products traditionally sold at farm stands and farmers’ markets are exempt from sales tax, not all are. Any farm that sells taxable products in Massachusetts must register at the Massachusetts Department of Revenue (DOR) MassTaxConnect website to collect sales tax. Once farms indicate on this website that they will accept sales tax, they will receive a Sales and Use Tax Registration Certificate (Form ST-1) for each business location.
What are vendors’ responsibilities?
Any farm business selling taxable items should display their ST-1 certificate in a location where customers can easily see it. Sales tax must be separately stated and charged on all receipts or bills, collected from customers at the time of purchase, and then sent by the farm to the DOR on time and with the appropriate Massachusetts sales tax return. In the case of regular sales tax, Form ST-9 (Sales and Use Tax Return) must be filed on an annual, quarterly, or monthly basis (depending upon the amount of tax owed). In the case of sales tax on meals, Form ST-MAB-4 (Sales Tax on Meals, Prepared Food and All Beverages Return) must be filed on a monthly basis. Records providing evidence of each transaction (as well as gross receipts) must be kept for at least three years.
Products that are exempt from sales tax
Many, but not all, of the products typically sold by farms are exempt from sales tax in Massachusetts.
Food products sold in stores
In general, food for human consumption that is not sold ready-to-eat is tax exempt. Examples of items that can be sold tax exempt in farm stores include the following:
- Fruits, vegetables, and fruit and vegetable products
- Dairy products (milk, eggs, ice cream, oleomargarine, etc.)
- Meat (including fish) and meat products
- Culinary herbs, spices, and salt
- Sugar and sugar products, candy, and confections
- Soft drinks, coffee beans, coffee substitutes, tea, cocoa, and cocoa products
- Ice when used for household consumption
- Grain, flours, and other grain products
- Baked goods that are prepackaged, or that are sold for consumption off-site in units of six servings or more (e.g. one whole loaf of bread, a whole pie or cake, a half dozen bagels, or six different single-serving baked goods)
- Individual baked goods that are sold for consumption off-site, but only in cases where no taxable beverages or meals are sold in the bakery area of the store
- Frozen foods, including frozen meals
- Any foods purchased with SNAP/EBT (even if they would otherwise be taxable in Massachusetts)
Be aware that any products sold as medicines, tonics, or dietary supplements are subject to regular sales tax in Massachusetts, so medicinal herbs, herbal products, and some herbal teas are taxable. In addition, the following items are subject to sales tax on meals in Massachusetts:
- Poured beverages like cups of coffee and soda (but not prepackaged beverages for off-site consumption)
- Ready-to-eat snacks like popcorn or single-serving baked goods (but not prepackaged snacks for off-site consumption)
- Heated prepared foods, or unheated entrées that can be heated in the store (but not frozen meals)
- Sandwiches, or combination plates that could reasonably be considered a meal (but not individual deli items like potato salad sold for off-site consumption)
Also note that a wider range of food products are taxable if they are sold by an entity considered to be a “restaurant” (such as in a sugar shack, ice cream stand, the café part of a farm store, food truck, etc.). For more detailed information on which items are subject to sales tax on meals in Massachusetts, see the DOR’s Guide to Sales Tax on Meals, and Sales Tax on Meals regulations.
Most clothing is tax exempt in Massachusetts, except for clothing solely to be used as athletic or protective gear. Examples of tax-exempt clothing and fiber products include the following:
- Aprons (household or shop)
- Cloth, fabric, and yarn to be used for clothing
- Hats, scarves, and gloves
- Shoes, slippers, and socks
- Infant diapers, receiving blankets, and bibs
- Costumes, work clothes, and other specialized clothing (other than athletic or protective clothing)
Note that if any clothing items sold are over $175, the amount in excess of $175 is taxable.
Other tax-exempt products commonly sold by farms
- Plants and seeds that can be grown to produce human food (but ornamental seeds/plants are taxable)
- Fertilizer and limestone (but pesticides/herbicides are taxable)
- Firewood and kindling for home heating
- Sales of livestock ordinarily used for food production (but not horses)
- Feed for livestock ordinarily used for food production (but food for pets or wild animals is taxable)
- Periodicals like magazines or newspapers
This page was last updated in May 2018. Funding for its contents was supported by the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service through grant 16FMPPMA0002. Its contents are solely the responsibility of the authors and do not necessarily represent the official views of the USDA.