Sales Tax Holiday to be Observed This Weekend- Meals and Drinks Excluded

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This weekend will mark the inauguration of what is now a legislatively mandated annual tradition- the Sales Tax Holiday. Unsurprisingly however, the rollout of this law has not been without issue. The State House caused confusion when it initially included restaurant meals in the upcoming tax holiday. After learning of concerns from restaurant owners themselves however, the Governor has amended the statute to exclude that industry.

Though held in the past, the state’s Governor was never required to designate a tax holiday weekend until passage of the Grand Bargain last year. In an expansive compromise with labor groups, that legislation mandated that an August weekend would be selected to serve that purpose annually. As reported by State House News Service, the Grand Bargain’s language made no distinction between retailers and restauranteurs, leading legislators to interpret it as applying to both. Restaurant owners objected however, explaining their point of sale systems did not enable them to separate taxes for alcohol- which was never included in the tax holiday- from meals. For that reason, Baker filed legislative amendments excluding meals from the Holiday, which the House and Senate immediately approved.

To ensure these revisions are understood and acted upon by business owners, the Commonwealth’s Department of Revenue has issued an updated Technical Information Release (TIR 19-10: Sales of Meals Excluded from the Annual Sales Tax Holiday Weekend) and a new list of Frequently Asked Questions (FAQs). This year, the weekend will run from Saturday, August 17th, through Sunday, August 18th. During that time, no sales tax should be applied to purchases that are for personal, non-business, use and do not include individual items priced above $2,500.

It should be noted that, beyond meals, drinks, and individual items priced over $2,500; there are some ineligible acquisitions, for which sales tax must still be applied. These include the purchase of:

  • items on layaway
  • telecommunications services
  • tobacco products
  • marijuana and marijuana products
  • gas
  • steam
  • electricity
  • motor vehicles- including motorboats

If you have any questions or concerns, please feel free to contact Christopher McDermott, the Chamber’s public affairs manager, at (978) 353-7600, ext. 224; or via email at cmcdermott@northcentralmass.com.