Sales tax, use tax and Internet purchases
Implicit support for continuation of the first-time homebuyer credit?

Massachusetts tax holiday Aug. 14-15

Get ready Bay State shoppers. Before it adjourned this weekend, the Massachusetts legislature agreed on an economic development bill that includes a state sales tax holiday on Aug. 14 and 15.

Details on the upcoming Bay State tax holiday

The bill has gone to Gov. Deval Patrick for his signature.

Although there's no advance word on how he feels about this comprehensive measure, Patrick has said in the past the he would sign legislation into law to establish a 2010 event that would let Massachusetts shoppers avoid the state's 6.25 percent tax on most purchases.

Massachusetts shoppers already get a year-round sales tax break on groceries, prescription drugs and clothing that costs less than $175 per item.

In 2008, the last time Massachusetts had a two-day sales tax holiday, the state's sales tax was waived on on most items costing up to $2,500. The 2010 proposal will essentially be the same.

During that August 2008 tax holiday, the state's sales tax rate was 5 percent. The Massachusetts sales tax rate went up in July 2009, but there was no tax holiday last year because of budget concerns.

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Question: I bought a personal item and the original price was > $2500 but because I was upgrading the item, the store gave me 80% of the value of my previously purchased ite. THus, there was a deduction which lowered the original price to below $2500. Is the item taxed on the original price or the price that was paid? I was told, by the vendor, that it was on the original price - therefore, the item was taxed (boutght on the tax holiday week-end in MA).

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