Source: https://www.mass.gov/technical-information-release/tir-14-7-the-2014-massachusetts-sales-tax-holiday-weekend
Timestamp: 2018-03-24 23:52:27
Document Index: 46961853

Matched Legal Cases: ['§ 109', '§ 6', '§ 1', '§ 73', '§ 26', '§ 1', '§ 6', '§ 1']

TIR 14-7: The 2014 Massachusetts Sales Tax Holiday Weekend | Mass.gov
Technical Information Release TIR 14-7: The 2014 Massachusetts Sales Tax Holiday Weekend
A recently enacted statute provides for a Massachusetts “sales tax holiday weekend,” i.e., two consecutive days during which most purchases made by individuals for personal use will not be subject to Massachusetts sales or use taxes. St. 2014, c. 287, § 109 (“the Act”). The Act provides that the sales tax holiday will occur on August 16 and 17, 2014 and on those days, non-business sales at retail of single items of tangible personal property costing $2,500 or less are exempt from sales and use taxes, subject to certain exclusions. The following do not qualify for the sales tax holiday exemption and remain subject to tax: all motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500. The Act charges the Commissioner of Revenue with issuing instructions or forms and rules and regulations necessary to carry out the purposes of the Act.
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. Purchases exempt from the sales tax under G.L. c. 64H are also exempt from use tax under G.L. c. 64I. Therefore, eligible items of tangible personal property purchased on the Massachusetts sales tax holiday from out-of-state retailers for use in Massachusetts are exempt from the Massachusetts use tax.
A. Non-Exempt Sales. All sales of motor vehicles,[1] motorboats,[2] meals,[3] telecommunications services,[4] gas,[5] steam, electricity, tobacco products[6] 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.
Exception: Under G.L. c. 64H, § 6(k) there is no sales tax on any article of clothing unless the sales 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 the threshold, the first $175 may be deducted from the amount subject to tax. The $2,500 threshold amount is not increased by $175.
Example: A furniture store customer has a coupon for 20% off her entire bill. She purchases a dining room table for $1,800, and a sofa for $3,500. The total discount available is $1,060 ($5,300 x .20), of which $360 is attributable to the table ($1,800 x .20), and $700 is attributable to the sofa ($3,500 x .20). No tax is due on the sale of the table. Tax of $175 is due on the sales price of the sofa, $2,800 ($3,500 - $700), as even its discounted price exceeds the $2,500 threshold.
G. Layaway Sales. A layaway sale is a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time and receives the property when the last payment is made. 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 16 or 17, 2014.
H. Special Order Items; Transfer of Possession after Sales Tax Holiday. Special order items such as furniture are eligible for the sales tax holiday 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. Generally, a customer pays for an item when: (1) the seller receives cash, a check, or a money order; (2) the seller processes a credit card or debit card transaction; or (3) the buyer and seller enter into financing arrangements with a third party, including an affiliated entity (but excluding seller financing where the seller extends credit to the customer). A prior special order purchase with a deposit paid before August 16, 2014 will not qualify for the holiday, even if the retail customer pays the entire remaining balance due on August 16 or 17, 2014.
J. Rentals. Generally, rentals for thirty days or less of tangible personal property other than motor vehicles and motorboats are eligible for the sales tax holiday, even if the rental period covers days before or after the holiday, providing payment in full is made during the sales tax holiday weekend. The sales tax holiday does not apply to rentals or leases of tangible personal property of any type if the term of the rental or lease contract is longer than thirty days.
L. Internet Sales. If a customer orders an item of eligible property over the Internet, the item is exempt if it is ordered and paid for on August 16 or 17, 2014 Eastern Daylight Time. Generally, a customer pays for an item when the seller receives a credit card number, a debit authorization, a check, or a money order. The actual delivery can occur after the holiday period. For example: a customer orders a computer over the Internet with a sales price of $2,000 and charges the sale to his credit card at 1:00 p.m. (EDT) on August 16 or 17, 2014; the computer has a delivery date of September 20, 2014. The sale is exempt since the computer was ordered and paid for during the sales tax holiday.
N. Returns. Generally, sales tax may only be refunded to a retail customer on returns within 90 days of the sale. G.L. c. 64H, § 1. For the 90 day period following August 16 or 17, 2014, when a customer returns an item that could have qualified for the sales tax holiday exemption, the vendor may not credit or refund sales tax to the retail customer unless (1) the customer provides a receipt or invoice that shows the tax was paid or (2) the seller’s records show that tax was paid. Sellers may set their own return policies. This requirement is not intended to change or extend a seller’s return policy.
A. Participation. All Massachusetts businesses normally making taxable sales of tangible personal property that are open on August 16 or 17, 2014 must participate in this sales tax holiday.
B. Erroneous Collection. Any sales or use tax erroneously or improperly collected by a retailer on August 16 or 17, 2014 must be remitted to the Department of Revenue.
C. Requirement of Nonbusiness Use by the Purchaser. Normal business records showing the date of sale, item(s) purchased, and selling price must be kept by the retailer/ vendor. The requirement that purchases under the Sales Tax Holiday be for nonbusiness use is unchanged and purchasers paying for tangible personal property with business credit cards or checks must be charged tax on the items purchased.
D. Out-of-State Retailers. Out-of-state retailers registered to collect Massachusetts sales and use taxes must participate in this sales tax holiday. Such retailers should not collect sales/use tax for items ordered and paid for on August 16 or 17, 2014 in accordance with the rules of this technical information release. The retailers must keep records sufficient to verify the date of sale, item(s) purchased, and selling price.
E. Penalties. Retailers that back-date sales occurring after August 17, 2014 or that forward-date sales that occurred before August 16, 2014 in order to make them appear to qualify for the sales tax holiday or otherwise fail to follow the rules in the TIR in order to improperly avoid collecting and remitting sales or use tax may be subject to the tax evasion penalties of G.L. c. 62C, § 73, including a felony conviction, a fine of not more than $100,000 or $500,000 in the case of a corporation, or by imprisonment for not more than five years, or both, and may also be required to pay the costs of prosecution. A vendor may not void and rewrite a sale that has taken place before August 16, 2014 for the purpose of bringing the transaction under the sales tax holiday rules.
AP:MTF:jet
TIR 14-7
[1] For sales tax purposes, the term “motor vehicle” means a motorized, self-propelled vehicle which is constructed and designed for transportation or travel over a land surface, including “low speed vehicles” and “limited use vehicles”, but not including motorized bicycles. See G.L. c. 90, TIR 09-20. The term “motor vehicle” also means “snow vehicle” and “recreation vehicle” as defined in section 20 of chapter 90B. See 830 CMR 64H.25.1 and G.L. c. 64H, § 26. Rentals of motor vehicles are also not eligible for the holiday.
[2] Motorboats, including jet skis, are not exempt under the sales tax holiday. For purposes of the holiday, a motorboat is any vessel or watercraft propelled by machinery, such as an inboard or outboard motor, whether or not such machinery is the principal source of propulsion. See G.L. c. 90B, § 1. Rentals of motorboats are also excluded from the sales tax holiday. Generally, the sales tax holiday will apply to purchases of canoes, kayaks, rowboats, and other types of watercraft with no mechanical propulsion, provided that the sales price is $2,500 or less.
[3] “Meals” are defined in c. 64H as “any food or beverage, or both, prepared for human consumption and provided by a restaurant, where the food or beverages is intended for consumption on or off the restaurant premises, and includes food or beverages sold on a ‘take out’ or ‘to go’ basis, whether or not they are packaged or wrapped and whether or not they are taken from the premises of the restaurant.” G.L. c. 64H, § 6(h); 830 CMR 64H.6.5.
[4] “Telecommunications services” are defined in G.L. c. 64H as “any transmission of messages or information by electronic or similar means, between or among points by wire, cable, fiber optics, laser, microwave, radio, satellite or similar facilities but not including cable television.” G.L. c. 64H, § 1. Sales of prepaid calling arrangements and cards are not eligible for the sales tax holiday. Telecommunications equipment, such as a telephone or cell phone purchased for nonbusiness use, is eligible for the sales tax holiday.
[5] The term “gas” here refers to natural gas; sales of gasoline are not subject to the sales tax under G.L. c. 64H.
[6] “Tobacco products” includes products subject to the excise under G.L. c. 64C such as cigarettes, cigars, and smoking and smokeless tobacco.