Sales tax holiday is this weekend

Sales tax holiday is this weekend

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Shoppers, start making your lists. The state’s annual sales tax holiday weekend starts Saturday, August 10, and runs through Sunday. Governor Deval Patrick signed a bill into law last Friday for the two-day exemption of the state’s 6.25 percent sales tax, for most items that cost up to $2,500.

Alcoholic beverages fall under the tax-free exemption. Motor vehicles, motorized boats, tobacco products, telecommunications services, natural gas, steam, electricity, and meals do not.

When a customer purchases multiple items on the sales tax holiday, as long as each item costs $2,500 or less, there is no upper limit on the tax-free amount on each purchase and separate invoices are not required.

When an item exceeds $2,500, however, sales tax is due on the entire price charged for the item. For example, a $3,000 item will be taxed on the full amount, not just the amount that exceeds $2,500.

Clothing is an exception. Since there is no state sales tax on clothing unless the cost exceeds $175, on tax-free weekend if a piece of clothing exceeds the $2,500 threshold, the first $175 may be deducted from the amount subject to tax. Groceries are always exempt from the sales tax.

For special orders or Internet orders that involve a later shipping date, items that are paid for in full sometime on August 10 or 11 will be exempt from the sales tax.

The law also provides a safeguard for indecisive shoppers, allowing them to purchase an item during the sales tax holiday and later exchange it for the same or a similar item at the same price. No tax is due, even if the exchange takes place after August 11.

Full details are available on the Department of Revenue’s website at www.mass.gov.

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