Gov. Patrick signs sales tax holiday law for August 14-15

A sales tax holiday is on tap for the weekend of August 14-15 now that Gov. Deval Patrick has signed an Economic Development bill that includes a provision for the sales tax holiday.

The rules of the road for this holiday are virtually the same as for all the previous sales tax holidays. Many non-business retail items costing $2,500 or less are exempt from the sales tax, but some items --motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products, and anything else costing more than $2,500 -- are not.

The sales tax exemption applies to sales of tangible personal property bought for personal use only; purchases by corporations or other businesses and purchases by individuals for business use remain taxable.

There is no sales tax on beer, wine and alcohol during the holiday. There is also no sales tax on single items of clothing that cost up to $2,500.

The Department of Revenue estimates that taxpayers will save somewhere between $20 million and $23 million over the holiday period. There was no sales tax holiday last year. In previous years, the holiday has saved taxpayers between $15 million and $17 million.

For detailed information on the sales tax holiday weekend, DOR has published a Technical Information Release. For a copy of the announcement of the bill signing, and details on other provisions of the economic development law the Governor signed today, click here.

Comments

[Robert Bliss]

Maryann; there is no form for customers to sign.

[Maryann]

What form do we have our customers sign?

[Robert Bliss]

Doreen, as you discovered yesterday, you should not have been charged the sales tax during the sales tax holiday weekend, and you have received a refund.

[Doreen Graca]

It has just come to my attention that I shed I purchased at Home Depot was taxed. It came with delivery and installation already configured into the purchase price. How do I get the tax credit? Do I need to go to Home Depot? I looked at the stipulations and do not see any that would apply to this purchase.

[Robert Bliss]

Q.M., in answer to your question about sales of items at an animal hospital, if they are normally subject to tax, and are for individual use (as opposed to a business buying the items), and are less than $2,500, there is no sales tax. Although the items might be purchased for use on pets, the purchaser is the individual who will use the item.

[Q.M]

I own an animal hospital. Since the items sold are for pets not people is that condsidered "tangible personal property bought for personal use only?" Are we required to collect sales tax this weekend?

[Robert Bliss]

Dave, there is no sales tax on airfares purchased in Massachusetts.

[Robert Bliss]

Nora, articles normally sold as a single unit must continue to be sold in that manner. Such articles cannot be priced separately and sold as individual items in order to obtain the sales tax holiday exemption.

However, if the items are priced individually, and each item is less than the $2,500 threshold, the invoice total is irrelevant. For example, a homeowner buys various kitchen cabinets, which are priced individually and each of which is sold for less than $2,500. The invoice total is $12,000. But the transaction qualifies for the sales tax holiday if sold and paid in full on that day.

These must be purchases for personal use. The same transaction with a home improvement contractor would be fully taxable, even during the sales tax holiday.

[Robert Bliss]

Heidi, there is no paperwork or form required for this sales tax holiday. That has changed since the last sales tax holiday, in 2008, when a form was required for purchases of $1,000 or more.

[Robert Bliss]

Chris, a cart rental fee is taxable under the sales tax as a short term rental of tangible personal property, and thus would qualify for holiday unless the cart is considered a motor vehicle. Rentals of motor vehicles are not eligible for the holiday

[Robert Bliss]

Ronnie, the sales tax holiday applies only to items purchased for personal use. Your contractor will not be able to buy building supplies for your job and receive the sales tax holiday.

[Ronnie]

I am having some work done on my house. Can the contractor purchase the materials and receive the tax savings or do I have to purchase the materials in order to receive the tax savings?

[Dave]

what about airfare?

[Nora McRae]

Can like material be split into multiple invoices of less than $2,500 each to avoid sales tax?

[Heidi S]

Is there a form that needs to be signed by our customers on tax free day showing that a product was purchased?

[Chris]

How does the tax holiday apply to a Use Tax (ie: cart rental fee) which is not necessarily a tangible item.

[Robert Bliss]

CVino, the retail association representing the package store owners has been in contact with their members informing them that the sales tax holiday extends to the sale of beer, wine and alcohol. Many news stories have been published with accurate information on this point as well. DOR has sent out its Technical Information Release. And DOR plans a further information statement in the next day or two on the holiday.

[Robert Bliss]

Mindy, there are no special forms required for this year's sales tax holiday.

[Robert Bliss]

James, headstones priced at up to $2,500 are not taxed during the sales tax holiday, and engraving is a service which would not be taxed in any event.

[Robert Bliss]

Frank, the computer is one item, and the warranty is a separate item.

[CVino]

have the Liquor store owners been notified about this holday? I just asked my local store and they said they had no idea they were not to charge Tax this upcoming weekend. so I checked the Abcc website and there is no mention there either.

[James Madden]

How about the purchase of a Headstone for a Grave? Is that taxable [to begin with] and if so, what amounts are taxable? Stone itself.. Engraving charges.. Stone placement fee [$400]

normally, would there be Sales Tax on these itmes? If so, does the Sale Tax Holiday apply to Headstones?

[Mindy]

Aug.9,2010

Where do we locate the proper forms needed for

the tax free holiday Aug. 14&15,2010. We are

business located in Ct on the Mass. line and

are a participant in Mass tax free holiday.

[Frank]

I'm about to purchase a computer which is under $2500. If I include the extended warranty, the total goes over $2500. Is the warranty considered part of a bundled package or is a separately priced item?

[Robert Bliss]

Sue, it will not be required during this year's sales tax holiday.

[Sue Gariepy]

Is the
Sales Tax Holiday Purchaser's Certification of Non-Business Use
Form going to be required for purchase over $1000.00??

The one on the website is form 2008 our last Sales Tax holiday