Massachusetts sales tax holiday weekend returns on August 14-15, 2010, according to the Massachusetts Department of Revenue. The tax-free holiday will work much the same as previous tax-free holidays, with the same rules and exemptions.
2010 Massachusetts Tax-free Holiday
Massachusetts lawmakers, including Governor Deval Patrick finalized the statue allowing for a a Massachusetts "sales tax holiday weekend, recently. Massachusetts was late in announcing the 2010 sales tax holiday weekend, as 18 other states had previously announced their sales. The Massachusetts 2010 sales tax holiday weekend allows shoppers to purchase items costing $2,500 without paying the regular 6.25% sales tax, according to the Massachusetts Department of Revenue.
Rules of the Massachusetts Sales Tax Holiday Weekend
The tax exemption only applies to items purchased for personal use, not business use. Individual items must also cost $2,500 or less.
What's Different for 2010?
This year, Massachusetts residents may want to stock up on their favorite liquors and wines for the holidays, as the tax-free weekend will include alcohol sales. The 2010 Massachusetts sales tax holiday weekend includes "alcoholic beverages sold for off-premises consumption" which means you will still pay tax on the drinks you purchase with a meal in a restaurant or at your favorite local bar.
Exclusions
Certain items are not included in the 2010 Massachusetts sales tax holiday weekend, and are subject to regular sales tax. The list of exclusions is almost identical to the list of previous Massachusetts sales tax holiday weekends.
Transportation-Related
The tax-free week will not include gasoline, motorized boats or vehicles.
Service-Based Purchases
Service-based purchases including meals at restaurants will still be subject to tax.
Utility Bills
Utility payments, including your electric bill, cable bill, Internet bill and cell phone bill are subject to regular taxes and fees.
Business Purchases
Purchases made on behalf of a business. This includes purchases by corporations and "other businesses and purchases by individuals for business use," according to the Massachusetts Department of Revenue. This could prove tricky for anyone running a business from home. It's unlikely a cashier at the store will ask if your printer or computer purchase is for home or business use. If you're buying items for your small business or at-home business, you will need to pay the tax. It may be best to inform the cashier, or skip the crowds and save your business purchases for another day.
Retail and Layaway
Know the rules before you shop. Your total retail bill can exceed $2,500 and still be tax-free. The tax-free rule covers individual items, and as long as none of those individual items exceed $2,500 you will avoid paying sales tax.
Items already on layaway will be taxed.
A clothing item which costs more than $175 before tax is subject to tax and is not exempt during the 2010 Massachusetts sales tax holiday weekend. Clothing items costing more than $175 are typically considered "luxury items."
Tobacco Products
Tobacco products will still be subject to the layers of taxation already placed on the products.
Sources
"Massachusetts legislature passes CORI reform, sales tax holiday"; http://www.masslive.com/news/index.ssf/2010/08/massachusetts_legislature_pass.html
Sales tax holiday, manufacturing tax breaks highlight Massachusetts economic development bill; http://www.masslive.com/news/index.ssf/2010/08/sales_tax_holiday_manufacturin.html
TIR 10-10, The 2010 Massachusetts Sales Tax Holiday Weekend; http://www.mass.gov/?pageID=dorterminal&L=7&L0=Home&L1=Businesses&L2=Help+%26+Resources&L3=Legal+Library&L4=Technical+Information+Releases&L5=TIRs+-+By+Year(s)&L6=2010+Releases&sid=Ador&b=terminalcontent&f=dor_rul_reg_tir_tir_10_10&csid=Ador
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