The Massachusetts sales tax holiday is back in August. Here’s what to know.
Your chance to save some cash is coming back on Aug. 17 and 18, 2019.
Everybody loves a deal.
And if there’s ever a prime opportunity to scoop one up in Massachusetts — maybe for that new couch or television you’ve been eyeing — that moment is coming soon.
For one weekend in August, the state’s sales tax holiday returns, giving shoppers a chance to make some big-ticket purchases without fretting over the Commonwealth’s usual 6.25 percent cut of the bill.
Here’s everything to know about the two-day, tax-free affair, including when it is and how you can use it.
When is the tax holiday?
This year’s holiday is set for Aug. 17 and 18.
It’s about a week later than last year’s event, when the annual, two-day exemption returned after lawmakers decided to forgo it in 2016 and 2017 because of budget gaps.
In June, Rep. Paul Donato told the State House News Service pushing the holiday back a week “would be a better time for businesses.”
And it’s not just for brick-and-mortar retail: If you’re shopping online, you can still take advantage of the tax exemptions as long as the item is ordered and paid for within Eastern Standard Time hours between Aug. 17 and 18.
“No sales tax is due on that purchase, even if delivery of the item occurs after the sales tax holiday weekend,” according to the state’s website.
Similarly, if you purchase an item in-store during the holiday, you can still schedule home delivery after the weekend ends without paying tax.
What’s exempt from being tax-free?
Some items and products are not tax-free during the weekend. They are:
- Motor vehicles
- Tobacco products
- Marijuana or marijuana products
- Alcoholic beverages
- Telecommunications services
- Any single item that costs more than $2,500
The tax holiday only applies to individuals who are buying items for personal use, according to the law. Businesses and corporations looking to make purchases for professional use will still have to pay sales tax.
What about meals?
Is there a limit? What is it?
Yes, there is a limit. The sales tax holiday only applies to items that cost $2,500 or less, according to the state.
If you spend over the limit, you’ll have to pay the sales tax for the entire cost of the item, not just the amount that exceeds $2,500.
When it comes to clothing, however, there is a caveat. Under state law, an item of clothing is already tax exempt if it costs less than $175, but if the price passes that threshold, only the amount over $175 is subject to tax.
“If on the sales tax holiday, the price of an item of clothing exceeds $2,500, the first $175 is not subject to tax,” according to the state’s website.
It’s important to note the $2,500 limit only applies to the cost of each individual item. If you purchase several items under that amount and the total bill surpasses $2,500, you won’t have to pay sales tax.
Are rentals tax-free? What about layaway purchases?
Generally speaking, rentals of up to 30 days are tax free during the holiday, but only if they are not one of the exempt items in the list above, such as motor vehicles or motor boats.
The rental must “be paid for in full on the holiday weekend” in order to be eligible, state officials said.
If you’ve made a pre-payment or deposit toward an eligible item that you promised to purchase ahead of the holiday, you cannot cancel the order and re-book over the tax-free weekend to avoid paying sales tax, according to state law.
Layaway sales also remain taxable over the weekend.
Do I have to pay tax if, after the holiday, I return or exchange an item I bought tax-free?
No. Taxes will not be retroactively charged.
What happens if I’m charged tax on an eligible item during the tax-free weekend?
According to state officials, you are entitled to a refund of the tax you paid from the business where you bought the item if you are charged the fee on an eligible purchase during the tax-free weekend.
“You should provide the business with your receipt or other proof of purchase to determine the amount of your refund,” according to the state’s website.
What else should I know?
If you’re unable to make that big purchase in August, there’s always next year.
Massachusetts lawmakers passed a law in 2018 that permanently creates a tax holiday weekend every year, so rest assured you’ll have another chance to score a deal.
But if you can’t wait until then, don’t forget: everyday is sales tax free in New Hampshire.
Did you know that the MA Sales Tax Holiday is now a permanent fixture? And this year it happens on August 17-18! View our #TaxFreeWeekend FAQ page for information and guidelines https://t.co/IP96a7jX1J pic.twitter.com/qBaTylw2Mx
— Massachusetts Dept. of Revenue (@MassRevenue) July 17, 2019
Editor’s note: An earlier version of this story published before legislation passed to exclude meals from the sales tax holiday. This story has been edited to reflect the change.