Thu, August 04, 2011
Massachusetts Sales Tax Holiday Next Weekend
The Bay State’s 2011 tax holiday was not a sure thing until this past Monday, when Governor Patrick signed the legislation. With all eyes on the strength of the economy, there were questions about whether the holiday would cut too deeply into the state’s tax revenues. Last year the tax holiday was announced with similarly short notice.
As in past years, the terms of the holiday provide that personal retail items costing $2,500 or less will be exempt from the state’s 6.25% sales tax if they are purchased during the weekend. The law specifically includes Internet purchases made on the 13th and 14th. Telecommunications services, tobacco products, gas. steam, electricity, motor vehicles, motorboats, and meals eaten out don’t qualify for the exemption.
Massachusetts has held its sales tax holidays for seven of the past eight years. The dates of sales tax holidays in other states can be found at the website of the Federation of Tax Administrators.
A recent analysis of state sales tax holidays by the Institute on Taxation and Economic Policy suggests that the holidays provide the greatest rewards to consumers who have surplus funds. It does seem, though, that all shoppers willing to wait and plan their purchases to coincide with a tax holiday can benefit.