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Eligible items will be free from tax the weekend of Aug. 10 and 11.
The Massachusetts Legislature approved Aug. 10 and 11 as the date for the state’s annual tax holiday.
The sales tax holiday is set for two consecutive days each year and allows most purchases made on those days to be exempt from the state’s typical 6.25 percent sales tax. Only purchases up to $2,500 are eligible.
Both legislative chambers approved the date on Thursday.
“The sales tax holiday is a great opportunity for residents to get out and support the local businesses in their community and get some shopping done during a time of year when people are gearing up for the fall,” said Senate President Karen E. Spilka in a statement.
What’s eligible, and what’s not, on a tax holiday
Only items bought for personal use are eligible under the tax exemption, according to the Department of Revenue.
Items bought online, even if they arrive after the holiday weekend, are also exempt from tax. Eligible items rented are tax free for up to 30 days if they are paid in full during the holiday weekend.
Here are the items exempt from the holiday:
- Meals
- Cars and motorboats
- Telecommunications services
- Gas
- Steam
- Electricity
- Tobacco and marijuana products
- Alcoholic beverages
Representative Jerry A. Parisella said this year’s tax free weekend is especially impactful due to the high rates of inflation across the nation.
“Consumers have faced higher prices for goods due to inflation, so this tax-free weekend is a great opportunity to provide individuals, families and businesses across the Commonwealth with some relief,” Parisella said in a statement.
State missed out on more than $36 million in tax revenue in two days last year
In a December 2023 memo to Comptroller William McNamara regarding last year’s tax-free days, Revenue Commissioner Geoffrey Snyder estimated that the amount of sales tax the state missed out on was $36.94 million.
That broke down into $24.23 lost for the General Fund; $6.75 lost for the MBTA; $5.9 million lost for the School Modernization and Reconstruction Trust Fund; and $56,987 lost for the Convention Center Fund.
Snyder added that an estimated $3.54 million was raised in indirect tax revenues due to increased economic activity that weekend.
Legislators say the holiday spurs revenue for small businesses
Over the past several years, tax free weekend has been held the second weekend in August.
Proponents say the holiday boosts revenue for small businesses and alleviates financial pressures on families during the back to school season.
“Each year, the Legislature’s temporary suspension of the sales tax aims to boost revenue for small businesses and enhance affordability for consumers,” said House Speaker Ronald J. Mariano in a statement.
Others, however, point to evidence that consumers shift the timing of their purchases instead of actually making more of them.
A 2017 study by the Federal Reserve System, which included Massachusetts, noted that while this may be the case, timing tax holidays during periods where consumers shop for necessities like school supplies is especially beneficial to low-income households.
“The sales tax holiday provides significant relief to families during a time of year where their checkbooks are already stretched from the purchase of back-to-school supplies and other family expenses,” said Senator Susan L. Moran.
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