Post Content

Last week the state legislature passed and Governor Charlie Baker signed into law the Sales Tax Holiday that will officially suspend the state’s 6.25% sales tax for the upcoming weekend of August 15th and 16th. State policymakers have passed an annual summer’s sales tax holiday for every year since 2004, with the exception of 2009.

As outlined in the law, the Commissioner of the Department of Revenue is vested with the responsibility of carrying out this act. With the bill going into effect in just a few short days, here’s everything you need to know about the sales tax holiday.

Q. Who qualifies for the sales tax holiday?

A. The sales tax holiday applies to individuals purchasing retail goods for personal use only. Purchases by corporations or other businesses—or purchases by individual for business use—remain taxable.

Q. Does the sales tax holiday apply to intangible property such as copyrights and trademarks?

A. No, the sales tax holiday only applies to tangible property.

Q. Do all retail goods qualify for the sales tax holiday exemption?

A. No. The following do not qualify for the sales tax holiday exemption: all motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500.

Q. Is there a limit to the retail value to which the sales tax holiday applies?

A. Yes. Taxes are exempt on eligible sales of items costing $2,500 or less.

Q. What if I spend more than $2,500 on an item?

A. If you spend more than $2,500 on a retail purchase, the entire amount is subject to the states sales tax, not just the amount that exceeds that threshold. There is, however, an exemption with respect to clothing.

Q. What if I purchase multiple items $2,500 or less that are all eligible for the tax exemption, but when added together cost more than $2,500?

A. As long as each individual item is $2,500 or less, you can ring all three items up together, tax free.

Q. What happens if I exchange or return the item once the sales tax holiday has ended? Will I be subject to the tax retroactively?

A. No. No tax is due even if the exchange is made after the holiday.

Q. Do rentals qualify for the sales tax holiday?

A. As long as they are not ineligible items such as motor vehicles or motorboats, individuals may take advantage of the sales tax holiday for rentals for up to 30 days. However, the purchase must take place on the weekend of the holiday.

Q. Do all retailers have to participate in the sales tax holiday?

A. Yes, all businesses normally making taxable sales of tangible property that are open on April 15 of 16 must participate in the sales tax holiday.

Q. What happens if I am a retailer that accidently collects sales tax this weekend?

A. Any sales or use tax erroneously collected this upcoming weekend must be remitted to the Department of Revenue.

P.S. In case you hadn’t heard, big changes are coming for business taxpayers! Check out how our new filing system—coming to you November 30th, 2015—will make paying taxes in the Commonwealth as easy as ever.

Written By:

Tags: , ,

Recent Posts

DOR Announces Updates to Offer in Compromise Program posted on Jan 10

The Massachusetts Department of Revenue (DOR) has updated its Offer in Compromise (Offer) program to streamline the process and incorporate best practices. Offer overview An Offer is an agreement between the taxpayer and DOR to settle a tax liability for less than the full amount   …Continue Reading DOR Announces Updates to Offer in Compromise Program

In Case You Missed It… posted on Dec 14

In Case You Missed It...

“If it isn’t on YouTube, it might as well have never happened.”- Gordon Korman Videos, Videos, Videos! In our What’s New at DOR update we highlighted our MassTaxConnect video tutorials as well as four videos to guide you through 2022’s filing season. Since the tutorials launched, we provided both English and Spanish subtitles for every video. Subscribe to DOR’s YouTube channel to   …Continue Reading In Case You Missed It…

Jobs! Jobs! Jobs! posted on Dec 13

Jobs! Jobs! Jobs!

Opportunities for employment abound here at the Massachusetts Department of Revenue. We are currently hiring for some of our key teams like the Fraud Unit, Tax, the Contact Center and the Collections Unit. What makes us stand out in the job market these days? Two   …Continue Reading Jobs! Jobs! Jobs!