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Massachusetts tax free weekend: What you need to know

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Many Massachusetts residents are looking forward to the tax free holiday.

The tax free weekend is taking place this Saturday and Sunday for the first time in three years.

Here is what you need to know about what will and won’t have a 6.25% sales tax this weekend according to mass.gov.

-During the sales tax holiday, most purchases by individuals of single items of tangible personal property costing $2,500 or less are exempt from sales and use taxes. For all purchases of tangible personal property eligible for the sales tax holiday exemption, transfer of possession or payment in full for the property must occur on one of the days of the sales tax holiday. Prior sales and layaway sales are not eligible for the sales tax holiday.

-When the sales price of any single item is greater than $2,500, sales tax is due on the entire price charged for the item. The sales price is not reduced by the threshold amount. For example, if an item is sold for $3,000, the entire sales price of the item is taxable, not just the amount that exceeds $2,500.

-The sales tax holiday exemption applies to sales of tangible personal property bought by individuals for personal use only. Purchases by corporations or other businesses and purchases by individuals for business use remain taxable.

– There is no sales tax on any article of clothing unless the sales price exceeds $175; in that case, only the increment over $175 is subject to tax. If, on the sales tax holiday, the price of an article of clothing exceeds the threshold, the first $175 may be deducted from the amount subject to tax. The $2,500 threshold amount is not increased by $175.

Examples:

1. A customer buys a suit during the sales tax holiday for $600. No tax is due.

2. A customer buys a wedding dress during the sales tax holiday for $2,550. Tax is due on $2,375 ($2,550 – $175).

-Unless otherwise indicated, all sales of motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products, marijuana or marijuana products and of any single item whose price is in excess of $2,500, do not qualify for the sales tax holiday exemption and remain subject to tax.

-If a customer orders an item of eligible property over the Internet, the item is exempt if it is ordered and paid for on August 11 or 12, 2018 Eastern Daylight Time (EDT).

If you have any questions, the full explanation of the holiday is available here: Sales-Tax-Holiday

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