FAQs – About the sales tax holiday (August 11-12, 2018)

The state legislature passed, and Governor Baker has signed into law, the Sales Tax Holiday that will officially suspend the state’s 6.25% sales tax for the weekend of August 11 and 12, 2018. Here are some highlights from the law. For more detailed information and definitions see the regulation.

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Who qualifies for the sales tax holiday?

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.

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

No. The following do not qualify for the sales tax holiday exemption:

  • Motor vehicles
  • Motorboats
  • Meals
  • Telecommunications services
  • Gas
  • Steam
  • Electricity
  • Tobacco products
  • Marijuana or marijuana products, and
  • Any single item whose price is in excess of $2,500

Prior sales and layaway sales are not included.

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

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

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

If you spend more than $2,500 on a retail purchase, the entire amount is subject to the state’s sales tax, not just the amount that exceeds that threshold. There is, however, an exemption with respect to clothing (see (3) (C) (i)).

What if I purchase multiple items $2,500 or less that are all eligible for the tax exemption?

As long as each individual item is $2,500 or less, you can ring all three items up together, tax free, even if all the items added together cost more than $2,500.

What happens if I exchange or return the item once the sales tax holiday has ended?

No tax is due even if the exchange is made after the holiday. You will not be subject to the tax retroactively.

Do rentals qualify for the sales tax holiday?

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.

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

Yes, all businesses normally making taxable sales of tangible property that are open for business on August 11 and 12 must participate in the sales tax holiday.

What happens if I am a retailer that accidentally collects sales tax this weekend?

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