Massachusetts meals tax: state rate, local option and service charges

Massachusetts taxes restaurant meals separately from other retail sales. The state rate is 6.25 percent of the price of a meal, and cities and towns that have adopted the local option add a further 0.75 percent, which brings the total to 7 percent. The Department of Revenue publishes the list of cities and towns that have adopted it. If your business serves food or drink in Massachusetts, you collect the tax from the customer and send it to the Department of Revenue, so the register has to get it right every time.

What is the Massachusetts meals tax and who pays it?

The state charges sales tax on meals sold by or bought from a restaurant, including a restaurant that is part of a larger store. The customer pays the tax at the till, and your business collects it and passes it on. The rate is 6.25 percent of the sales price of the meal. The Department of Revenue's guide on mass.gov was updated in June 2025, so read the current version before you set your rates.

You are the collector, not the payer, which means a mistake lands on you. If your register under-charges tax for a year, the Department of Revenue can bill your business for the missing amount, plus interest and penalties, even though the customer never paid it.

How does the local option meals tax work?

Massachusetts lets each city or town vote to add up to 0.75 percent to the meals tax. The state collects the money along with its own and sends all of it back to the municipality. A town that has adopted the option has a combined rate of 7 percent, and one that has not stays at 6.25 percent. Since July 1, 2024, the Department of Revenue has used a Meals, Food and Beverage account type to report the state and local meals taxes together, according to Bloomberg Tax, so check that your registration shows the right account type.

Because the rate depends on the town, a business with more than one location, or a caterer who delivers across town lines, needs to check the rate for the place where the sale happens. Look up your town on the Department of Revenue's local option page rather than relying on a third-party rate site, which may be out of date.

What counts as a taxable meal?

In general, food and drink prepared for immediate consumption, whether eaten on the premises or taken away, is a taxable meal. That covers table service, counter service, takeout, delivery orders you prepare, and alcohol you serve with or without food. Groceries sold unprepared are not taxed as meals, which is why a loaf of bread from a bakery counter and a sandwich from the same counter can be treated differently. The line can be fine, and the Department of Revenue has published detailed guidance for bakeries, coffee shops, markets and catering.

If you sell both meals and groceries, such as a cafe with a retail shelf, set up separate tax categories in your point of sale so each item is taxed correctly.

Are service charges and tips taxable?

This is the question owners most often get wrong. A voluntary tip that the customer decides on is not part of the price of the meal and is not taxed. A mandatory service charge, such as an automatic charge on a large party, is generally treated as part of the price of the meal and is taxable. If a charge is automatic and the customer has no choice, assume it is taxable and confirm with the Department of Revenue guide. Whatever your policy, label the charge clearly on the menu and the check, because Massachusetts also has a separate law about what must be done with service charges (see our guide to the Massachusetts tip law).

What about gift cards, delivery and catering?

Ask the Department of Revenue how to treat the sale and the redemption of a gift card. Delivery and catering orders are meals, and tax applies to the food and, in most cases, to any delivery or setup charge that is part of the price. If you use a third-party delivery platform, find out in your agreement who collects and remits tax on those orders, since arrangements differ by platform and state. Check the current rules for marketplace sales.

How do you register and file?

You need to register with the Department of Revenue to collect sales and meals tax, through the state's online tax portal. Filing frequency, monthly, quarterly or yearly, depends on how much tax you collect. Returns are due on a fixed schedule, and late returns bring penalties. Many owners hand this to a bookkeeper, but the responsibility stays with the business, so keep your records and know your due dates.

How do you set up your register?

1. Set the correct combined rate for your town, and review it each July and January in case a town votes a change.
2. Tag every menu item as a meal or a grocery item.
3. Make sure modifiers, add-ons and retail items inherit the right tax rule.
4. Show tax as its own line on the receipt.
5. Test a few sample orders each time you change the menu or the system.

Whatever system you use for ordering, takeout and payments, confirm it can apply different tax treatment to different items, and that it prints the tax separately. If you take online orders, check that the tax on the website matches the tax at the counter.

What should you check before you rely on this guide?

Tax rules change. The state rate and local option are set by law, and guidance is updated from time to time. Before you change your register or file a return, read the current Department of Revenue guide on sales tax on meals, and ask your accountant if you have unusual items, such as prepared food sold through a grocery license, or event catering. Keep a copy of the guidance you used and the date you read it.

More guides for your business:

• Massachusetts happy hour ban: what bars and restaurants can offer instead
• Massachusetts tip law: tip pools, service charges and house fees
• Hiring and keeping restaurant staff in Massachusetts: a practical guide

More in the US guides for food businesses.