SMALL BUSINESS ENERGY EXEMPTION FROM SALES TAX

Small Business Energy Exemptions Certificates (SBE) are administered by the Massachusetts DOR, qualifying small businesses may be exempt from paying taxes on energy. Small businesses apply online for an exemption certificate through the Department of Revenue’s MassTaxConnect application.

Exemption certificates are effective for up to two years.  Prior to the expiration date, DOR will send a reminder to all small businesses with a current exemption.  Renewals will be done through MassTaxConnect during November and December in the year of expiration.  Renewed certificates will then be valid for the upcoming two years.

What does this mean?

  • Customers must file this form directly with their community’s current supplier or the supplier may start charging the customer sales tax
  • Customers must re-file for the Form SBE every 2 years

How do customers register for the SBE?

  • Customers register for the SBE through MassTaxConnect. After logging into your account select “More…” then under “Other Actions” select “Request or Update Small Business Energy Exemption”.
  • If you don’t have a MassTaxConnect account, click here for more information.

What happens if applicable customers do not do this?

  • The supplier may be required to add sales tax to the customer’s monthly bill.

Requirements for Claiming the Credit

  • Gross income less than $1,000,000 in the prior year and anticipated for the current year;
  • 5 or less full-time employees; and
  • Energy must only be used by the qualifying business.

For more information, please visit Massachusetts Small Business Tax Exemption

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