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Massachusetts State Excise Taxes 2024 - Fuel, Cigarette, and Alcohol Taxes

What is an Excise Tax?

An excise tax is a tax directly levied on certain goods by a state or federal government. The most prominent excise taxes collected by the Massachusetts state government are the fuel tax on gasoline and the so-called "sin tax" collected on cigarettes and alcoholic beverages.

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An excise tax is not the same thing as the Massachusetts Sales Tax.

The Massachusetts Sales Tax is collected as a percentage of the final purchase price of all qualifying sales, and is collected directly from the end consumer of the product.

Massachusetts' excise taxes, on the other hand, are flat per-unit taxes that must be paid directly to the Massachusetts government by the merchant before the goods can be sold. Merchants may be required to attach tax stamps to taxable merchandise to show that the excise tax was paid.

Even though excise taxes are collected from businesses, virtually all Massachusetts merchants pass on the excise tax to the customer through higher prices for the taxed goods.

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Massachusetts per capita excise tax

Massachusetts collects an average of $372 in yearly excise taxes per capita, lower then 72% of the other 50 states.

Massachusetts General Excise Taxes - Gasoline, Cigarettes, and More

Massachusetts collects general excise taxes on the sale of motor fuel (gasoline and diesel), cigarettes (per pack), and cell phone service plans. Other general taxes, similar to excise taxes, may be collected on other items including transportation tickets, gas guzzlers, vehicle sales, firearms, tanning salons, and more.

Massachusetts Alcohol Excise Taxes - Liquor, Wine, and Beer

Massachusetts collects special excise taxes on the sale of all types of alcohol, subdivided into specific taxes on wine, beer, and liquor (hard alcohol other then wine and beer). Alcohol taxes are sometimes collectively referred to as "sin taxes", which also include excise taxes on cigarettes, gambling, drugs, and certain other items.

Please note that the IRS also collects a federal excise taxes on alcoholic beverages, which are included separately from Massachusetts' alcohol taxes in the final purchase price.

Massachusetts Excise Tax Deductions & Refunds

Can I deduct my Massachusetts Excise taxes?

Unlike the Massachusetts Sales Tax, excise taxes are not generally deductible on Massachusetts income tax returns or on your federal tax return. However, the IRS occasionally allows certain excise taxes to be deducted for certain tax years.

Vehicle Tax Deduction

Massachusetts sales and excise taxes on cars or vehicles bought during 2009 may be deducted once from your federal tax return. You cannot deduct excise taxes for vehicles bought during other years.

Phone Tax Deduction

You may deduct excise taxes paid on long-distance phone calls between the years of 2003 and 2006 from your federal tax return.

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Can I get a Massachusetts Excise Tax Refund?

While sales tax refunds are available for goods that are purchased in Massachusetts and exported, Massachusetts excise taxes paid on goods are generally non-refundable. Incentives may exist allowing certain state of federal excise taxes to be refunded on goods bought for specific uses, but such incentives change frequently.

Massachusetts Excise Tax - References