Are face masks exempt during sales tax holidays?

A host of normally taxable items, including clothing and school supplies, are exempt from sales tax during upcoming August sales tax holidays. Are face masks?

Like much related to sales tax, it depends on the state. During the August 29–30 Massachusetts sales tax holiday, almost any item priced up to $2,500 that’s purchased in Massachusetts for personal use qualifies for the exemption. Face masks purchased by an individual should qualify, though face masks purchased by a business for employee use would not.

The Florida Department of Revenue recently announced that face masks would qualify for the 2020 back-to-school sales tax holiday. According to department spokesperson Bethany Wester, cloth and disposable masks “are now considered ‘clothing.’” Thus, if they’re priced less than $60 (the price limit for clothing, footwear, and certain accessories), they’ll be exempt from Florida sales tax August 7–9.

It’s worth noting the Florida Department of Revenue 2020 back-to-school sales tax holiday tax information publication has not been updated to reflect the department’s new position, at least not as of August 4, 2020. It doesn’t mention “face masks” and still lists the following as taxable:

• Paint or dust masks
• Protective masks (athletic)
• Swimming masks

Florida appears to be the first state to make face masks eligible for a sales tax holiday. Whether others will follow suit remains to be seen.

Most state departments of revenue have already published lists of qualifying and non-qualifying items on their websites — lists created before COVID-19 made everyday mask wearing a thing. If “mask” or “face masks” made these lists, they’re usually under a “Non-exempt” or “Taxable” heading. For example:

• The Ohio Department of Taxation puts breathing masks, face shields, and paint or dust respirators on its list of “not eligible” protective equipment
• The South Carolina Department of Revenue lists “protective and safety masks and goggles (athletic, sport, or for work)” as “not exempt”
• The Texas Comptroller categorizes “protective masks” as “taxable” during the Texas sales tax holiday — though “mask, costume,” is exempt

Because face masks must now be worn in public in many parts of the country, these or other states may reconsider whether face masks should qualify for the temporary sales tax exemption provided during sales tax holidays. According to the Connecticut Department of Revenue Services, a 2020 press release on the upcoming sales tax free week is “Coming Soon.” The existing guidance doesn’t mention face masks.

Yet the Texas Comptroller has already released information about the 2021 emergency preparation supplies sales tax holiday. Topping the list of “These supplies do not qualify for tax exemption” is “medical masks and face masks.”

Differing lists of exempt and taxable items are one reason sales tax holidays make sales tax compliance so challenging, especially for online retailers doing business in multiple sales tax holiday states: An item (like a face mask) qualifying for the temporary exemption in Florida may be taxable in Texas. Differing price restrictions also add to the complexity, as do differing rules regarding layaways, rain checks, and shipping costs.

When sales tax is handled manually, sales tax holidays drain time and resources. Managing sales tax in the cloud is a better option.