Shop (tax-free) for energy efficient products in Maryland
- Feb 3, 2020 | Gail Cole
A host of energy efficient products will be exempt from Maryland sales and use tax during the upcoming Shop Maryland Energy sales tax holiday. Each year, the Old Line State provides this tax-free period to encourage residents to replace energy-sucking products with more energy efficient ones.
The 2020 sales tax holiday starts at 12:01 a.m. Saturday, February 15, and runs until midnight Monday, February 17, 2020. During that time, the following products are eligible for the exemption if they have the Energy Star® label:
- Air conditioners
- Compact fluorescent light bulbs
- Heat pumps
- Programmable thermostats
- Refrigerators (standard size only)
- Washers and dryers
Energy Star solar water heaters are now exempt from Maryland sales tax all year.
Qualifying products are exempt whether new or used. And layaway sales qualify for the exemption if the layaway agreement is made during the Shop Maryland Energy weekend and the item to be purchased is removed from normal inventory at that time.
Items purchased with a rain check during the tax-free period qualify for the exemption. However, if a rain check is received during the February sales tax holiday but used later, sales or use tax will apply to the later sale.
As always, both buyers and sellers should maintain records of exempt transactions. These include proof that the product qualifies as an Energy Star product and proof that it was purchased during the Shop Maryland Energy weekend. Records should be kept for four years from the date of purchase, in addition to any other record-keeping requirements under Maryland law.
Out-of-state sellers must respect the sales tax holiday
Businesses based in other states that have an obligation to collect and remit Maryland sales or use tax should not apply sales or use tax to qualifying sales during the tax-free weekend, provided the sale is completed between February 15 and February 17. The exemption generally doesn’t apply to back-ordered items.
To learn more about which remote sellers may be liable for Maryland sales and use tax, visit Avalara’s seller’s guide to sales tax nexus and sales tax collection requirements.
For additional details about the upcoming Maryland sales tax holiday, including the eligibility of items purchased by a contractor for use in the course of business, see Shop Maryland Energy.