Rodman & Rodman, P.C., an independent accounting and tax firm based in Newton, MA, outlines the rules that will be in effect for Massachusetts’ Sales Tax Holiday Weekend on August 16-17, 2014.
“The Commonwealth of Massachusetts will not be collecting the 6.25 percent sales tax on non-business purchases of $2,500 or less made by individuals” explains Thomas Astore, CPA, JD, and Partner at Rodman & Rodman, P.C. “Business purchases and purchases made by corporations remain taxable. Massachusetts businesses open during this weekend and selling taxable items of tangible personal property are required to participate in this sales tax holiday.”
Rodman & Rodman outlines items that are eligible as well as those that are excluded from the Sales Tax Holiday:
Business purchases are excluded, which also means any purchase made with a business check or business credit card.
All services are excluded. Only tangible purchases are eligible. Airline tickets and sporting events are considered services.
Motor vehicles (which include ATVs and small motorcycles), motorized boats, telecommunications services (including prepaid calling arrangements and cards), gas, steam, electricity, tobacco products and meals are excluded from the sales tax holiday. But, telecommunications equipment (cell phones and related items for personal use) is eligible.
Any single item with a price that is in excess of $2,500 is excluded. If the single item’s price exceeds $2,500, it will be taxed in full. For example a $3,000 plasma TV will be taxed on the entire $3,000 sale price.
When more than one item is purchased at the same time, and each item has a price of $2,500 or less, then all of the items may be rung up on one receipt and all the items are tax-free.
There is no sales tax on clothing unless the sale price exceeds $175. For an article of clothing exceeding this amount, the $175 will be deducted from the price and the remaining amount will be taxed.
If a store coupon or discount provided by a retailer or manufacturer reduces the sales price of the item, the discounted sales price determines whether the sales price is within the sales tax holiday price threshold of $2,500 or less.
Prior sales and lay-a-ways do not qualify for the tax-free status under any circumstances.
Special order items such as furniture are eligible so long as they are ordered and paid in full on the sales tax holiday weekend, and the cost of each item is $2,500 or less, even if delivery is made at a later date.
Internet purchases are exempt from sales tax as long as they do not exceed $2,500 (and meet other criteria) and are made and paid for on August 11 or 12, Eastern Standard Time.
For specific tax questions contact Rodman & Rodman, P.C. at (617) 965-5959.
About Rodman & Rodman P.C.
Founded in 1961 and listed in the Boston Business Journal’s “Top 50 Firms,” Rodman & Rodman, P.C. provides accounting, tax and business services to small and medium-sized companies. The Rodman & Rodman “Green Team” is a specialized green energy and clean technology accounting and tax services practice within Rodman & Rodman, P.C. that serves “green” clients throughout the U.S. The company is Green Business Certified. For more information, email info@rodmancpa.com, visit their website at www.rodmancpa.com or contact (617) 965-5959.
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