Managing Your Money

MA state sales tax holiday is back!

After being absent last year, the state sales tax holiday in Massachusetts is back for 2010. This weekend, on August 14th and 15th, consumers who purchase items that cost less than $2,500 will not have to pay the 6.25% MA sales tax on those purchases. However, certain rules apply. Here are a few of the major ones:

1) Motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products do not qualify for the state sales tax exemption.

2) Single items whose purchase price exceeds $2,500 do not qualify for the state sales tax exemption. Single items which exceed the $2,500 limit will be taxed on the entire purchase price not just the amount above the $2,500.

3) There is no limit to the amount of items that can qualify on a single receipt as long as the purchase price of each item is below $2,500. For example, you can purchase 3 items each costing $1,000 on the same receipt and all three items will be exempt from state sales tax.

For more information about the MA sales tax holiday and the specific rules, click here.

Keep in mind that, as with most sales tax holidays, saving 5% - 10% on a big ticket purchase is a great way to save money on items that you were already planning on purchasing. It is not necessarily a good reason to go out and purchase a big ticket item just because you can save on the sales tax. Especially since many retailers already offer 5% - 10% savings on a regular basis through their weekly sales offers.

If you don't live or shop in Massachusetts, many other states also have sales tax holidays. Here is a link to a summary of holidays by state for 2010.

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