Boston tax rates stack in three layers. Massachusetts charges a flat 5% state income tax, with an added 4% surtax on income above roughly $1 million. The statewide sales tax is 6.25%, and Boston tacks on a 0.75% local meals excise, bringing restaurant checks to 7%. For fiscal year 2026, Boston property is taxed at $12.40 per $1,000 of assessed value for homes and $26.96 per $1,000 for commercial, industrial, and personal property.1City of Boston. How We Tax Your Property Vehicles garaged in the city carry a separate annual excise tax at $25 per $1,000 of value.
Massachusetts Income Tax
Every resident pays the same 5% state rate on wages, salaries, interest, dividends, and most other income. There are no graduated brackets. Whether you earn $40,000 or $400,000, the rate is the same, applied to income after Massachusetts-specific deductions and exemptions.
High earners face a second layer. The Fair Share Amendment, in effect since 2023, adds a 4% surtax on the portion of taxable income above a threshold that started at $1 million and is adjusted for inflation each year.2Massachusetts Department of Revenue. Massachusetts 4% Surtax on Taxable Income A Boston resident with $1.2 million in taxable income in 2026 pays 5% on the whole amount and an additional 4% on the portion above the inflation-adjusted threshold. Surtax revenue is directed to transportation and public education.
Federal income tax applies on top of all of this. A single Boston resident earning $80,000 would pay 5% to Massachusetts and land in the 22% federal bracket on part of that income, for a combined marginal rate near 27% before any deductions.
Sales and Meals Tax
Most retail purchases in Boston are taxed at the statewide rate of 6.25%.3General Court of Massachusetts. Massachusetts General Laws Chapter 64H Section 2 – Sales Tax; Services Tax; Imposition; Rate; Payment Prepared food and beverages sold at restaurants carry an extra 0.75% local meals excise the city has adopted, so dining out is taxed at 7% total.4Mass.gov. Local Option Excise Taxes Vendors collect both at the register.
Several everyday purchases sit outside the sales tax. Grocery staples bought at a supermarket are not taxed. Clothing and footwear are exempt up to $175 per item; only the portion of a single item’s price above $175 gets taxed at 6.25%.5Commonwealth of Massachusetts. 3.103 Exemption for Clothing A $200 jacket triggers tax on $25, not the full price.
If you buy something online and no sales tax is collected, Massachusetts expects you to pay use tax at the same 6.25% rate. In practice, most large online marketplaces now collect Massachusetts sales tax automatically.
Boston Property Tax Rates for FY2026
Boston sets new rates each fiscal year, which runs July 1 through June 30. For FY2026:1City of Boston. How We Tax Your Property
- Residential: $12.40 per $1,000 of assessed value
- Commercial, industrial, and personal property: $26.96 per $1,000 of assessed value
The tax is ad valorem, so your bill tracks the city’s assessment of your property’s value. A home assessed at $600,000 generates a $7,440 base bill before any exemptions. The Assessing Department revalues every property annually, and the Mayor and City Council set the rates after public hearings.
Bills go out quarterly. The first two of the fiscal year are preliminary estimates based on the prior year; the final two reflect the new assessment and adopted rate. If your assessment looks wrong, you can file an abatement application, typically due within 30 days of receiving your actual tax bill.
Boston uses a split-rate system. The commercial rate is more than double the residential rate, shifting a larger share of the burden onto business property. For homeowners, that produces a lower effective rate than in many Massachusetts communities that apply a single blended rate to all property types.
The Residential Exemption for Owner-Occupants
If you own your Boston home and live in it as your primary residence, the residential exemption cuts your FY2026 bill by up to $4,353.74.6City of Boston. Residential Exemption On the $600,000 home above, that drops the $7,440 base bill to roughly $3,086.
To qualify, you generally must have owned and occupied the property as your principal residence on January 1 of the year before the fiscal year begins. For FY2026 that date is January 1, 2025. Boston has expanded eligibility so that homeowners who recorded a deed and moved in between January 1 and June 30, 2025, may also qualify.6City of Boston. Residential Exemption The application deadline for FY2026 is April 1, 2026.7City of Boston. Filing for a Property Tax Exemption
The exemption is a flat-dollar reduction applied after assessment, which by design helps owners of lower-valued homes the most and shifts weight toward investment properties, second homes, and landlord-owned units. Stop living in the home for the majority of the year and you lose it, potentially with a retroactive adjustment.
Motor Vehicle Excise Tax
Any vehicle garaged in Boston owes an annual excise tax at the statewide rate of $25 per $1,000 of value. Value is not what you paid; it’s a percentage of the manufacturer’s suggested retail price that steps down with age:
- Year of manufacture: 90% of MSRP
- Second year: 60%
- Third year: 40%
- Fourth year: 25%
- Fifth year and beyond: 10% (the minimum)
A new car with a $40,000 MSRP is valued at $36,000 in year one, producing a $900 excise bill. By year five the taxable value drops to $4,000 and the bill falls to $100. The city bills annually. Unpaid excise can block your license renewal and vehicle registration through the Registry of Motor Vehicles. Move to Boston partway through the year and you’ll get a prorated bill for the remaining months.
Capital Gains When You Sell
Boston’s home values make capital gains a real consideration at sale. Federal law lets you exclude up to $250,000 of profit on a primary residence, or $500,000 for a married couple filing jointly, if you owned and lived in the home for at least two of the five years before selling. With median Boston home values well above $600,000, the exclusion covers most sellers but not everyone, especially owners who bought decades ago.
Gain above the exclusion is taxed at both levels. Massachusetts taxes long-term capital gains at the standard 5% rate, and the 4% surtax applies if the gain pushes your total taxable income over the surtax threshold.2Massachusetts Department of Revenue. Massachusetts 4% Surtax on Taxable Income A married couple selling for $1.8 million with $700,000 in gain would exclude $500,000 and owe tax on the remaining $200,000, with the surtax kicking in if that amount lifts their income past the threshold.