Tax Year Prior to 2020: why did you charge sales tax on filing the Mass tax return. Services in Mass. are not taxable

[Bill69]

you charged a sales tax illegally on the filing of the Mass. Income Tax. Services are not taxable in state of Mass. I have argued with you seems like every year and you still do it. what is your problem? you are leaving yourself open for a lawsuit.. I want the sales tax back of $1.25 that you charged on the service fee of $19.99. Check your sales tax codes before you do your programs. This may be reported to other agencies unless you fix it immediately

[Bill69]

I am still waiting for someone to get back to me about this. credit due $1.25 on my filing charge and $1.25 on my son's filing. Mass does not collect taxes on services. 

[MN66]

Same thing just happened to me. Checked back for several years and was never charged for this previously.

[CarissaM]

This would be best discussed with a customer service representative, please click here to follow the instructions for the best representative. 

[MN66]

HI, I just spoke with a Turbotax Rep and she said that the filing fee is considered taxable and they are collecting sales tax on this fee for the state. 

[ThomasM125]

I'm not an expert on sales taxes, but I imagine the issue involves the definition of a service versus a product. The TurboTax software is clearly a product, so the filing option attached to it would seem to be part of the product as well.

However, I am sure if you consult with the sales tax department at the Massachusetts Department of Revenue they could provide a reliable determination for you.

[Bill69]

not true. read the tax code. filing a tax form is a service and services are not taxable. I know because i handled this when i was working. Turbotax is wrong and if they do not change their policies, they will lose business. It is a way for them to get extra money and they keep it. I have argued with them several times over the years and I have won. Why now?

[WKins2]

According to the Massachusetts Department of Revenue and Letter Ruling 12-8: Cloud Computing: "Massachusetts imposes a 6.25% sales tax on sales of tangible personal property and telecommunications services within the Commonwealth, including sales of pre-written (also called “canned” or “standardized”) software regardless of the method of delivery"

Charging sales tax for the TurboTax produts (and any associated products within the program) is required by Massachusetts. 

 https://www.mass.gov/guides/sales-and-use-tax

[gmjfallon]

I believe that is the same for Arizona. Anyone find a place to contact a TurboTax support person for this? I think I'll file with TaxAct next year if I don't get an answer.

[steve17]

Call their rep. Explain that Mass does NOT tax services (and never has.) I've used TTax for over 20 years and have not seen sales tax until this year. I talked to someone at Mass Tax Connect and they confirmed the above statement.

[aossom]

Here below the information I shared in another thread on this same topic:

I found this thread after calling TurboTax about this very issue. I was shocked to see a "sales tax" for Massachusetts residents using TurboTax online despite the fact that we do not have taxes for professional (accounting) services in our state.

The agent I spoke with informed me the policy is motivated by recent Massachusetts legislation which requires online retailers to charge customers the same sales taxes as they would be charged for brick and mortar stores.

However, we are not charged taxes for accounting services--even if they are provided by brick and mortar retailers--because most professional services (including accounting) are exempt from tax according to Massachusetts laws and regulations (see MASS. GEN. LAWS ch. 64H, §§ 1-6 and the MASS. CODE REGS. 64H (830)). Unless a tangible item is received by the customer, which is not the case for TurboTax online, the services are exempt from sales tax. The rules on this are very clear.

You can see the exemption for ‘personal or professional services’ on the official Commonwealth of Massachusetts' website here: https://www.mass.gov/guides/sales-and-use-tax#-tax-exempt-items-&-sales-  

You can also look for ‘accounting and bookkeeping’ at Table 1 and the paragraph labeled ‘Massachusetts’ here: https://www.cga.ct.gov/2019/rpt/pdf/2019-R-0104.pdf