Massachusetts Sales Tax Holiday

Revenue Apportionment in New England

The state legislature has passed a bill providing a two-day sales tax “holiday” in Massachusetts. Governor Baker has indicated he will sign the bill, and once he does, H.3659 will exempt many sales consummated next weekend, August 15 and 16, allowing vendors to forgo both collection and remittance of tax otherwise applicable on those days. Sales tax holidays like this have been offered in Massachusetts on an annual, year-to-year basis for a number of years.

There are some restrictions. To qualify for the sales tax exemption, the transaction must involve personal property with a “per item” price of $2,500 or below. Only nonbusiness sales qualify for the exemption (business to business sales do not qualify).

Several items are specifically excluded, including certain energy purchases, certain tobacco products, motorized vehicles, motorized boats, and meals. Examples of qualifying purchases are new tires for a car, appliances, school supplies (yes, it is almost here), and – for the faithful – Red Sox hats and jerseys.

Mere commitments to purchase, such as layaways or ordering, will not qualify. One of the restrictions calls for either transfer of possession or full payment to occur on either August 15 or 16.

The full text of H.3659 may be found here.

If you would like to discuss further, please call BNN’s state and local sales tax practice leader Merrill Barter, or your BNN advisor at 1.800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

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