Post Content

If history is any guide, reporters will be calling DOR next week asking how much retail activity the sales tax holiday will have generated on the weekend of Aug. 13-14.

This is a question DOR will not be able to definitively answer, ever, because of the way in which sales tax is reported.

Companies have until the 20th of the month following to pay their sales tax. They report their entire month's taxable receipts, then calculate their payment by multiplying times .0625 percent, which reflects the sales tax rate of 6.25 percent.

They will not report receipts from Aug. 13 and 14 since those will be non-taxable. Only the individual retailers will know how much business they generated over those two days.

Thus, DOR is left to estimate the revenue loss/taxpayer gain that the sales tax holiday generates. Our current estimate is $20.5 million. There is also no way for DOR to calculate additional sales retailers may garner over the weekend as a result of sales tax holiday publicity which induces consumers, presumably in a buying mood, to purchase tax exempt items such as clothing costing less than $175.

The second question, and this comes mainly from smaller retailers, concerns the practice of larger retailers with substantial advertising budgets who urge consumers to come into their stores before the holiday to pre-select items for purchase over the weekend.

One large furniture retailer in an ad says, "We'll let you in on a little secret. You don't have to wait for the Tax Free weekend to come to …… Because as you can imagine, when everyone is trying to buy furniture or mattresses at the same time, it can get pretty hectic. Purchase between now and August 13th and 14th and your purchase will be Tax Free. Then, on August 13th or 14th, simply call us at ……. or stop by one of our locations and we'll process your order in no time. Tax Free!"

At first blush, this ad may seem to violate the rules and regulations governing the holiday which clearly state that retailers are not allowed to back-date or forward-date sales to August 13 and 14th. However, retailers are allowed to have customers come in and pre-select merchandise — as long as the sale itself does not occur until Aug. 13 or Aug. 14.

In other words, it's okay to pick out your items for purchase in advance, but you cannot swipe the credit card or have the sale processed until the sales tax holiday weekend is underway to get the no sales tax benefit.

Now, go ahead and shop!

Written By:

Recent Posts

Take a look under the hood: MassTaxConnect, DOR’s newest e-filing system posted on Sep 17

Take a look under the hood: MassTaxConnect, DOR’s newest e-filing system

As you’ve probably heard, DOR has a new electronic filing system—MassTaxConnect—coming to business taxpayers November 30th, 2015. We’ve blogged about MassTaxConnect before, including about the top 10 benefits business taxpayers can expect from the system as well as “What’s New” with the system compared to   …Continue Reading Take a look under the hood: MassTaxConnect, DOR’s newest e-filing system

Child Support Enforcement mentioned in national publication posted on Sep 4

Erica Gaynor, Workflow Implementation Manager with the Child Support Enforcement (CSE) Division was published in the August edition of the U.S. Dept. of Health and Human Services’ Administration for Children and Families’ newsletter “The Child Support Report”. Gaynor and CSE’s work with predictive analytics is garnering national   …Continue Reading Child Support Enforcement mentioned in national publication

Courage at Work posted on Sep 1

Courage at Work

“I was amazed that Mark and so many senior staffers took time out of their busy and hectic schedules to be supportive of me and the ALS cause,” she said. “It proves that no matter how challenging work is, there’s always time to show a little love.”