Fri, August 06, 2010
Massachusetts Sales Tax Holiday: Back By Popular Demand
After taking a one-year hiatus, the Commonwealth of Massachusetts is again joining several other states in giving consumers a two-day “sales tax holiday.”
It’s time to start planning your big-ticket purchases.
Last year’s pause in the Bay State’s annual sales tax break was thought to be a temporary response to the state’s slumping tax revenues, and so it was. Today Governor Deval Patrick signed an Economic Development bill that provides for a Massachusetts tax holiday on August 14th and 15th.
As in past years, retail items costing $2,500 or less will be exempt from the state’s 6.25% sales tax during that weekend. Telecommunications services, tobacco products, gas. steam, electricity, motor vehicles, motorboats, and meals don’t qualify for the exemption, but other items are fair game. The items must be purchased for personal use to qualify for the exemption. In past years, many merchants have held sales on the tax holiday weekend and have allowed customers to place their orders ahead of time, completing the transaction over the weekend to qualify for the exemption.
The state Department of Revenue is estimating that this year’s holiday will save taxpayers $20 -23 million. Shoppers from New York and Rhode Island – neighboring states that don’t offer a tax holiday – will likely join in the festivities.
Last year, the legislature raised the state’s sales tax (from 5%) and applied it for the first time to beer, wine and alcohol sales, so this year’s holiday will apply to these items as well.
Other states hold tax holidays, too: for a listing of state tax holidays, visit the Federation of Tax Administrators website.