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Maryland Sales Tax Holiday Week

  • Aug 13, 2012 | Susan McLain

Maryland Sales Tax Holiday week has begun!

Coined “Shop Maryland,” the holiday stretches from “[t]he second Sunday of August to the following Saturday….”

This year, that means “[f]rom 12:01 a.m. on Sunday, August 12, through midnight on Saturday,  August 18, 2012….”

Exempt Items

In Maryland, only clothing and footwear are eligible during the tax free week. Each item must be sold for $100.00 or less to qualify. Examples of Exempt items:

  • Adult and baby diapers
  • Athletic supporters
  • Baby clothes
  • Boots, general purpose and boot liners
  • Coats
  • Corsets and corset lace
  • Dresses
  • Dry cleaning services (non-commercial)
  • Ear muffs
  • Employee uniforms
  • Flip flops
  • Fur coats and stoles
  • Garters
  • Gym suites and uniforms
  • Hiking boots
  • Hunting vests
  • Jogging apparel
  • Laundry services (non-commercial)
  • Leotards and tights
  • Lingerie
  • Prom dresses
  • Ski suits and vests
  • Surgical uniforms
  • Tuxedos (sold or rented)
  • Work clothes and uniforms (not protective0

Note: Many states do not allow rentals to be included in their tax-free holiday, but Maryland does.

Taxable Items

“Items that cost more than $100 will be taxable. Accessories, including jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, belt buckles, and backpacks will be taxable.” Special clothing or footwear primarily designed for protective use or not intended for everyday use are also taxable.

Some Vendor Rules

  • If a single item costs over $100.00, the whole sales price is taxable, not just the amount over $100.00.
  • “…vendors selling items other than clothing and footwear may choose to absorb and pay the sales and use tax on any sales that are subject to the Maryland sales and use tax.”
  • “…a vendor may assume and absorb all or any part of the sales and use tax on a retail sale and pay that tax on behalf of the buyer, a vendor may choose to absorb and pay the sales and use tax on clothing and footwear priced greater than $100.”
  • No special reporting is required to report exempt sales made during the sales tax holiday week.

Specific Situations

Online Sales – If an item is both paid for and delivered during the tax-free period or the order is accepted for immediate shipment, an eligible item may qualify for the exemption.

Alterations – Alterations are taxable.

Sewing Items – “…items, such as fabric, thread, yarn, buttons, snaps, hooks, and zippers, will be taxable.”

Items Normally Sold As A Unit – Clothing or footwear normally sold as a unit cannot be broken up into separates to avoid sales tax. Boxed gift sets such as a tie and dress shirt or hat and scarf are taxable.

Store Coupons – Store coupons may be used to reduce the sales price of an item in order to qualify.

Manufacturers Coupons – Manufacturers and third-party coupons are “…subtracted after the tax is levied, not before, so they wouldn’t lower the price for tax purposes.”

Rain Checks – Rain checks issued during the holiday but used afterwards do not qualify an item for exemption. Items purchased during the holiday are sales tax exempt.

Layaway – Items placed on layaway during the Shop Maryland week are eligible. A customer may place the items on layaway during the holiday, but complete the layaway and receive the merchandise after the period ends and “[t]he total purchase is exempt from tax.”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”