Sales Tax Holiday Weekend Set For August 13-14

This weekend marks the return of the annual Sales Tax Holiday here in Massachusetts. On Saturday, August 12 and Sunday, August 13, most retail items of up to $2,500, purchased in Massachusetts for personal use, will be exempt from sales tax. However, purchases by corporations or other businesses along with purchases by individuals for business use are not exempt.

While the bulk of retail items qualify for the exemption, there are some items that are still taxable and do not qualify for the exemption this weekend including: alcoholic beverages, electricity, gas, marijuana or marijuana products, motor vehicles and motorboats, telecommunications services, tobacco products, and any single item whose price tag is more than $2,500.

With the rise in internet commerce, an item will qualify for the sales tax holiday exemption if you order and pay for an eligible item over the internet on the sales tax holiday during Eastern Daylight Time.

For retailers, you must take part in this weekend’s sales tax holiday if your business normally makes taxable sales of tangible property in Massachusetts or to purchasers in Massachusetts and is open for business on August 12 and 13. If a purchaser needs to return or exchange an item once the sales tax has ended, they will not be subject to the tax retroactively.  Any sales or use tax erroneously collected on the sales tax holiday weekend must be remitted to DOR. If a customer seeks a refund of tax collected in error from you, you must refund the tax to the customer. If you have already remitted the tax to DOR, you may file an amended return to recover amounts refunded to customers. To report exempt sales, on your August Sales and Use Tax Return, you will report the amount of tax not charged on items during the Sales Tax Holiday as “Exempt Sales” [Line 2].

As mentioned, the sales tax holiday exemption is limited to eligible sales of items costing $2,500 or less. If you spend more than $2,500 on an item, the entire amount paid for the item is subject to sales tax, not just the amount that exceeds that threshold. For those planning to purchase multiple items at the same time, if the price of each individual item is $2,500 or less, you can combine as many items as you want, tax-free, even if the combined items cost more than $2,500.

For complete information on the sales tax holiday head to: Mass.Gov Sales Tax Holiday Page.