Sales Tax Holiday Frequently Asked Questions
Updated: August 7, 2023
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Sales Tax Holiday Dates
In 2023, the sales tax holiday will be on:
- Saturday, August 12 and
- Sunday, August 13.
Do you qualify?
The sales tax holiday applies only to eligible retail items bought for personal use by individuals.
What remains taxable?
- Purchases by corporations or other businesses
- Purchases by individuals for business use.
What retail items do not qualify for the sales tax holiday exemption?
The following items are still taxable and do not qualify for the sales tax holiday exemption:
- Motor vehicles
- Telecommunications services
- Tobacco products
- Marijuana or marijuana products
- Alcoholic beverages, and
- Any single item whose price is more than $2,500.
What about internet sales? Do those sales qualify for the sales tax holiday exemption?
Yes. An item will qualify for the sales tax holiday exemption if you order and pay for an eligible item over the internet:
- On the sales tax holiday and
- During Eastern Daylight Time.
No sales tax is due on that purchase, even if delivery of the item occurs after the sales tax holiday weekend.
What about layaway sales?
Layaway sales do not qualify for the sales tax holiday exemption.
Do rentals qualify for the sales tax holiday?
If you rent an item that qualifies for the sales tax holiday exemption, you can use the sales tax holiday for rentals of up to 30 days.
However, the rental must be paid for in full on the holiday weekend.
Exempt rentals do not include:
- motor vehicles or
Do all retailers have to participate in the sales tax holiday?
Yes. All businesses must take part in the sales tax holiday if the business:
- Normally makes taxable sales of tangible property in Massachusetts or to purchasers in Massachusetts and
- Is open for business on August 12 and 13.
Is there a limit to the retail value to which the sales tax holiday exemption applies?
Yes. The sales tax holiday exemption is limited to eligible sales of items costing $2,500 or less.
What if I spend more than $2,500 on an item?
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.
What if I purchase multiple items that each cost $2,500 or less, but the total price is more than $2,500? Are all items eligible for the sales tax holiday exemption?
If the price of each individual item is $2,500 or less, you can combine as many items as you want, tax-free, even if the combined items cost more than $2,500.
Is there an exemption on clothing?
Yes. An item of clothing is generally exempt from the sales tax unless the item costs more than $175.
For items that cost more than $175, only the amount over $175 is subject to tax.
On the sales tax holiday, if the price of an item of clothing is less than or equal to $2,500, the entire amount is not subject to tax.
On the sales tax holiday, if the price of an item of clothing is more than $2,500, the first $175 is not subject to tax but the rest would be.
A business has advertised that a purchase I made prior to the sales tax holiday weekend can be canceled and re-booked on the holiday. Can I do that and avoid paying sales tax?
No. You can’t cancel your prior purchase and re-book the purchase on the sales tax holiday weekend to avoid the sales tax if you:
- Put down a deposit on,
- Prepaid for or
- Otherwise promised to pay for an eligible item prior to the sales tax holiday weekend.
Do I have to take home an item I purchase on the sales tax holiday weekend for that purchase to qualify for the sales tax holiday exemption?
No. If you pay for the item in full on the sales tax holiday weekend, you can arrange for delivery of the item after the sales tax holiday weekend.
After the sales tax holiday
What happens if I exchange or return an item once the sales tax holiday has ended?
No tax is due even if the exchange is made after the holiday. You will not be subject to the tax retroactively.
What do I do if I find that I was charged sales tax on an eligible item purchased during the sales tax holiday?
If you were charged tax in error, the business that you bought your item from is responsible for giving you a refund of the tax you paid.
To determine the amount of your refund, you should provide the business with your:
- Receipt or
- Other proof of purchase.
What happens if I am a retailer that accidentally collects sales tax this weekend?
Any sales or use tax erroneously collected on the sales tax holiday weekend must be remitted to DOR.
If a customer seeks a refund of tax collected in error from you, you must refund the tax to the customer. If you have already remitted the tax to DOR, you may file an amended return to recover amounts refunded to customers.
How do I report exempt sales on my August return?
On your August Sales and Use Tax Return, you will report the amount of tax not charged on items during the Sales Tax Holiday as “Exempt Sales” [Line 2].