What Is Taxed at 12% in Massachusetts?
In Massachusetts, certain goods and services are taxed at higher rates than the standard 6.25% sales tax. Specifically, short-term rentals, hotel rooms, and alcoholic beverages served in restaurants may be taxed at 12% or more, depending on local surcharges.
Short-Term Rentals and Hotel Rooms
Staying at a hotel, motel, or short-term rental (like Airbnb or Vrbo) in Massachusetts? Expect to pay a combined room occupancy tax of up to 12% or higher, which typically includes:
5.7% state tax
6.0% local option tax (varies by city or town)
0.7% convention center financing fee (in certain areas)
Some municipalities add additional fees, pushing the total tax rate beyond 12%. Always check your total before booking, especially in cities like Boston or Cambridge.
Alcoholic Beverages in Restaurants
Alcohol served on-premises (in restaurants, bars, or cafés) is also subject to a higher tax rate:
A 6.25% meals tax is applied to the entire bill.
Alcohol sold for immediate consumption may carry additional local taxes, often pushing the total to 12% or more, especially in areas with a local meals tax surcharge.
Note: This does not apply to packaged alcohol sold at liquor stores or supermarkets, which is generally taxed at the standard rate.
Why the Higher Rates?
These elevated tax rates are designed to:
Generate local revenue from tourism and hospitality.
Fund public infrastructure in high-traffic areas.
Support state and regional projects, such as convention centers.
Since they target non-essential or luxury services, these taxes are less likely to impact day-to-day expenses for residents.
Conclusion
In Massachusetts, if you're booking a hotel, staying in a short-term rental, or ordering a cocktail with dinner, expect taxes of 12% or higher. These targeted rates help fund local initiatives while shifting some of the tax burden to tourism-related activities.
