The Commonwealth of Massachusetts will not be collecting sales tax on tangible purchases of $2,500 or less that are for personal use. Business purchases and purchases made by corporations remain taxable.
Rodman & Rodman, P.C., Certified Public Accountants and Business Strategists catering to small and medium sized companies throughout New England, offers retailers and consumers a quick breakdown of the special rules for the tax free weekend:
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), meals, motorized boats, telecommunications, gas, steam, electricity and tobacco products are excluded.
Rentals of tangible personal property apply, except for motor vehicles and motor boats, as long as the rental is paid for in full during the sales tax free weekend. Golf carts are eligible because they are not considered motorized vehicles.
A single item with a price exceeding $2,500 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 items are tax-free.
Bundled items, such as computer packages that include computer, monitor, keyboard and printer in a single sales price only qualify for tax exemption if the price of the entire bundle is less than $2,500.
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.
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 16th or 17th Eastern Standard Time.
Prior sales and lay-a-ways do not qualify under any circumstances. The sale has to be generated during the tax-free weekend to count.
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.
Rodman & Rodman, P.C.
Founded in 1961, Rodman & Rodman, P.C. provides accounting, tax and business services to small and medium-sized companies throughout New England. With a focus on strategic planning, Rodman & Rodman goes beyond traditional accounting services and takes a proactive approach when serving clients to increase, preserve and sustain clients’ financial net worth.
From business valuations, taxation, audits, fraud detection and prevention services and succession planning to a variety of accounting IT services including software selection, implementation and training, the team at Rodman & Rodman serves as comprehensive advisors to clients. For individual clients, the company offers personal advisory services such as planning for real estate transactions, obtaining financing, estate planning and retirement planning as well as planning for college education. Rodman & Rodman Certified Public Accountants are located at 3 Newton Executive Park in Newton, Mass. For more information, visit their website at www.rodmancpa.com or contact Jen Reading at (617) 965-5959.