Not only will shoppers have the chance to make purchases tax free, with exceptions, over the Aug. 17 and 18 weekend, a lunch or dinner meal will be tax free as well. However, if you buy an alcoholic beverage, that will not be tax free.
The state's tax free holidays will now become an annual program. As the state's Dept. of Revenue website notes, "Legislation was signed into law in 2018 that established an annual sales tax holiday for one weekend each year."
The specific weekend date may vary. This year, the sales tax holiday is set for Saturday, Aug. 17 and Sunday, Aug. 18.
Massachusetts first held a sales tax-free weekend in 2004, according to the Federation of Tax Administrators website.
Several years ago, however, state leaders did not set a tax-free holiday due to the economy, struggling to revive itself from the Great Recession. Before the end of 2018, legislators approved the setting each year of a tax-free weekend.
On the sales tax holiday weekend, purchases by individuals of most retail items, including meals, are not subject to the state sales tax or the local option meals tax. The current state sales tax is 6.25 percent.
The state DOR anticipates issuing further guidance about the sales tax holiday, so stay tuned for updates. Meanwhile, here are some frequently asked questions, with answers, about the sales tax weekend, per the state's website, mass.gov./orgs/massachusetts-department-of-revenue.
Q. Who qualifies for the sales tax holiday?
A. The sales tax holiday applies to individuals purchasing retail items for personal use only. Purchases by corporations or other businesses — or purchases by individuals for business use — remain taxable.
Q.Do all retail items qualify for the sales tax holiday exemption?
A. No. The following do not qualify for the sales tax holiday exemption: motor vehicles; motorboats; telecommunications services; gas; steam; electricity; tobacco products; marijuana or marijuana products; alcoholic beverages; and any single item whose price is more than $2,500.
Q. Do meals qualify for the sales tax holiday exemption?
A. Yes. Beginning with the sales tax holiday in 2019, meals are eligible for the sales tax holiday exemption. Alcoholic beverages sold as a meal or as part of a meal are not eligible for the sales tax holiday exemption and are subject to tax.
Q: Is there a limit to the retail value to which the sales tax holiday exemption applies?
A:Yes. The sales tax holiday exemption is limited to eligible sales of items costing $2,500 or less.
Q:What if I spend more than $2,500 on an item?
A. If you spend more than $2,500 on an item, the entire amount paid for the item is subject to sales tax, not just the amount that exceeds that threshold. There is, however, an exemption with respect to clothing. An item of clothing is generally exempt from the sales tax unless the item costs more than $175. If it does, 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.