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.