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Massachusetts Sales Tax Holiday

  • Aug 6, 2012 | Susan McLain

Massachusetts House Bill 4352 (HB 4352 Section 80) was signed by Governor Deval Patrick July 31, 2012.

Among other appropriations, HB 4352 sets aside August 11, 2012 and August 12, 2012 as sales tax holiday days.

According to the bill:

  • "...for the days of August 11, 2012 and August 12, 2012, a vendor shall not add to the sales price or collect from a nonbusiness purchaser an excise upon sales at retail of tangible personal property…."
  • The holiday “…shall not include telecommunications, tobacco products subject to the excise…., gas, steam, electricity, motor vehicles, motorboats, meals or a single item the price of which is in excess of $2,500.”
  • An excise erringly “…collected during the days of August 11, 2012 and August 12, 2012, shall be remitted to the department of revenue.”

An accounting of the amount of sales tax “foregone” during the holiday is expected to be provided by December 31, 2012. Previous years reports can be found here.

Last year, the sales tax holiday rules stated the following rules:

Layaway – “Layaway sales do not qualify for the sales tax holiday, even if the last required payment (or payments necessary to complete the transaction) are made on…” the sales tax holiday days.”

Rain checks – “Issuance of a rain check during the sales tax holiday weekend will not qualify otherwise eligible property for the sales tax holiday exemption if the property is actually purchased after the sales tax holiday.” However, a rain check that is redeemed during the holiday “…will qualify for the exemption regardless of when the rain check was issued if the rain check is used on the sales tax holiday weekend.”

Rentals – “…rentals for thirty days or less of tangible personal property other than motor vehicles and motorboats are eligible for the sales tax holiday, even if the rental period covers days before or after the holiday, providing payment in full is made during the sales tax holiday weekend.”

Rebates – If a manufacturer’s rebate is able to be applied at the time of transaction (such as a manufacturer’s coupon), then the rebate may be used to “…reduce the sales price at the time of the sale….” However, if the rebate is applicable post-sale, such as a mail-in rebate, “…the full purchase price of the property determined whether the sales price is within the sales tax holiday price threshold of $2,500 or less….” Vendor cash discounts may be applied to the sale to reduce the sales price of an item.

Internet sales – An internet item purchased during the sales tax holiday “…is exempt if it is ordered and paid for…” during the sales tax holiday. Internet sales are applicable during Eastern Daylight Time zone. Actual delivery can occur after the holiday but payment in full must occur during the holiday.

Single unit items – Items “…normally sold as a unit must continue to be sold in that manner.”

“All Massachusetts businesses normally making taxable sales of tangible personal property that are open…” during the sales tax holiday “…must participate….” In addition, “Out-of-state retailers registered to collect Massachusetts sales and use taxes must participate in this sale tax holiday.”

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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.”