Massachusetts’ tax-free weekend: Everything you need to know
Massachusetts’ tax-free weekend is once again upon us, taking place this Saturday and Sunday. If you are looking to save a bit of cash, here’s what you need to know about the sales-tax holiday:
What is it?
It’s a two-day break from paying the state 6.25 percent sales tax on most purchases in Massachusetts. The holiday has become something of a tradition, with state lawmakers approving a day or two of tax-free shopping most summers since 2004 (the exceptions were 2009 at the height of the recession, 2016, and 2017, when lawmakers cooled on the idea). It first began under former governor Mitt Romney as a way to join a growing number of states that were enacting such measures to stimulate the economy.
Last year, the Legislature made the holiday permanent. This year’s tax holiday weekend is Saturday, Aug. 17, and Sunday, Aug. 18.
What are the limitations?
The big limit to remember is that the sales-tax break only applies to retail items priced $2,500 or under. It also specifically excludes meals; cars, boats, and other vehicles; gas; utilities; cigarettes and other tobacco products; marijuana; and alcohol.
So if you’re eyeing the latest deluxe refrigerator or stove, make sure its price tag comes in at $2,500 or less if you want to take advantage of the tax savings. And don’t expect to see a break on your cable bill or bar tab.
Your item must also be paid for in full on the day you make the purchase, so you can’t put items on layaway and still get the tax savings.
Do I have to visit a store to get the savings?
If you are crowd-averse, you can make your purchases online and still get the sales-tax break, as long as the purchase is made during the sales-tax holiday window, which begins at midnight Saturday and ends at 11:59 p.m. Sunday, Eastern Daylight Time.
Can I buy things for my business?
No. The state mandates that purchases be made for personal use only: “Purchases by corporations or other businesses — or purchases by individuals for business use — remain taxable,” according to the state’s website.
How much is this costing the state?
The Globe reported in 2015 that the sales-tax holiday had cost the state $186.6 million over 10 years, according to Department of Revenue estimates. Since then, the state lost out on $25.5 million during the 2015 weekend and $27 million over the 2018 weekend.
And some critics of the sales-tax holiday say that rather than making new purchases, consumers are simply waiting to make planned purchases until the tax weekend, blunting the intended stimulus effect.
What’s the benefit?
Proponents of the sales-tax holiday say the millions of dollars lost to the state end up in the pockets of Massachusetts consumers. And retailers love that it brings in business to shops in the typically slower month of August. The head of the Retailers Association of Massachusetts last year called it a “proven winner.”
Correction: An earlier version of this story mischaracterized the cap on the sales tax break. It is applicable to items priced $2,500 or under.