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The Massachusetts legislature has set August 10 and 11 because the date for the state's annual tax holiday.
The sales tax-free period is about for 2 consecutive days every year and allows most purchases made on those days to be exempt from the state's standard 6.25 percent sales tax, apart from purchases as much as $2,500.
Both legislative chambers approved the date on Thursday.
“The sales tax-free period is a great opportunity for citizens to get out, support local businesses in their community and do some shopping during a time of year when people are preparing for fall,” Senate President Karen E. Spilka said in an announcement.
What is and shouldn’t be permitted in a tax exemption
Only items purchased for private use are exempt from tax. in keeping with information from the tax office.
Items purchased online are also tax exempt, even in the event that they arrive after the vacation weekend. Qualified rental items are tax-free for as much as 30 days if paid in full in the course of the holiday weekend.
The following items are exempt from the vacation:
- Meals
- Cars and motorboats
- Telecommunications services
- gas
- steam
- electricity
- Tobacco and marijuana products
- Alcoholic drinks
Representative Jerry A. Parisella said this yr’s tax-free weekend was particularly impactful due to high inflation rates across the nation.
“Consumers are facing higher prices for goods due to inflation, so this tax-free weekend is a great opportunity to provide some relief to individuals, families and businesses across the Commonwealth,” Parisella said in an announcement.
The state lost greater than $36 million in tax revenue on two days last yr
In December 2023 memo In a memo to Comptroller William McNamara regarding last yr's tax-free days, Finance Commissioner Geoffrey Snyder estimated that the state lost $36.94 million consequently.
Of this, $24.23 went to the General Fund, $6.75 went to the MBTA, $5.9 million went to the School Modernization and Reconstruction Trust Fund, and $56,987 went to the Convention Center Fund.
Snyder added that an estimated $3.54 million in indirect tax revenue was generated resulting from increased economic activity this weekend.
Lawmakers say the vacation boosts small business revenue
In recent years, the tax-free weekend has all the time taken place on the second weekend in August.
Supporters say the vacation increases sales for small businesses and eases financial pressures on families in the course of the back-to-school season.
“Every year, the Legislature’s temporary sales tax suspension aims to increase revenue for small businesses and improve affordability for consumers,” House Speaker Ronald J. Mariano said in an announcement.
Others, nonetheless, discuss with evidence that customers postpone the timing of their purchases as a substitute of really making more purchases.
One yr 2017 study The Federal Reserve System, of which Massachusetts is a member, noted that while this stands out as the case, it is especially helpful for low-income households to schedule tax holidays during times when consumers are looking for essentials equivalent to school supplies.
“The sales tax exemption provides significant relief to families at a time of year when their checkbooks are already strained by the purchase of school supplies and other family expenses,” said Senator Susan L. Moran.
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