Tax-Free Weekend: What You Need to Know

This weekend's Massachusetts means many items won't have the 6.25 percent additional charge that's paid to the state, but it doesn't apply to every purchase.

Here’s what you need to know:

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

Rules:

• All sales of motor vehicle, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco 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.
• When the sales price of any single item is greater than $2,500, tax is due on the entire price charged for the item. 
• Normally, there is no sales tax on clothes unless the 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 $2,500, the first $175 may be deducted from the amount subject to tax. The $2,500 amount is not increased by $175.
• You can purchase and pay for as many items as you like even if they add up to over $2,500 and not pay sales tax, just as long as no individual item is over $2,500.
• If you purchase a tax-free item this weekend, but want to exchange it at a later date, as long as it’s an even exchange, you don’t need to pay sales tax.
• Layaway sales do NOT qualify for the sales tax holiday, even if the last required payment (or payments necessary to complete the transaction) are made on August 13 and 14, 2011.
• However, if you purchase an item this weekend and it’s delivered at a later date, you pay no sales tax, as long as you pay for the item in full this weekend.
• There will be NO sales tax on items purchased over the internet, as long as you pay for it in full on August 13 or 14