2025 Massachusetts Sales Tax Holiday Set for August 9 and 10

The Massachusetts Department of Revenue recently announced that the state’s annual sales tax holiday for 2025 will begin at midnight on Saturday, Aug. 9, and end at 11:59 P.M. on Sunday, August 10. Participation is mandatory.

What our clients who collect and remit sales tax should know

• All businesses that typically make sales of tangible property in or to purchasers in Massachusetts will participate in the holiday, provided the business is open Aug. 9 and 10, 2025.
• If a retailer accidentally collects sales tax during the holiday, the collected amount must be remitted to the state.
• If a customer requests a refund for tax collected in error, the retailer is required to provide the refund. If the tax has already been reported on the retailer’s return, the retailer should file an amended return to reflect the correction.
• Exempt sales during the holiday should be reported on line 2, “Exempt Sales” of the August Sales and Use Tax Return for Massachusetts.

What consumers who are making purchases of tangible personal property should know

This exemption only applies to eligible “tangible personal property” bought for personal use by individuals for a per-item price of $2,500 or less during the holiday period. Retail items that do not qualify for the holiday include meals, motor vehicles, motorboats, telecommunication services, gas, steam, electricity, tobacco products, and marijuana or marijuana products. Purchases by corporations or other businesses will remain taxable, as well as purchases by individuals for business use.

Whether the $2,500 sales tax exemption applies during the holiday is determined by the price of each item per unit. For example, suppose a consumer purchases multiple items of furniture in a single transaction, and the total exceeds $2,500. In that case, sales tax will not apply if each item is priced and separately stated at $2,500 or less. However, any item with a sale price over $2,500 is fully taxable, with no partial exemption on the first $2,500 of its cost, excluding clothing. Additional important details regarding the holiday include:

• Items purchased over the internet will qualify for the exemption if you order and pay for the item on the internet on the holiday and during Eastern Daylight Time. The exemption will still apply if the item is delivered after the holiday.
• Layaway sales will not qualify for the exemption.
• If an item is rented during the holiday, it will be exempt provided that the rental period does not exceed 30 days, and payment is made in full during the holiday. Rentals of motor vehicles and motorboats do not qualify for the exemption.
• For clothing costing more than $2,500, the first $175 of the purchase would not be subject to sales tax.
• You cannot cancel and repurchase to take advantage of the sales tax holiday if you have already placed a deposit, made a prepayment, or otherwise committed to purchasing an eligible item before the holiday begins.
• Exchanges or returns made after the holiday will be exempt from sales tax, provided the original purchase occurred during the sales tax holiday. Please keep a receipt or other proof of purchase for your records.