Massachusetts joins Georgia & Maryland in offering mid-August sales tax holidays

Massachusetts shoppers are getting used to making last-minute retail arrangements, at least when it comes to the state's sales tax holiday.

The Bay State legislature always seems to wait until the last minute to approve the tax-free event. 2012 is no different.

Gov. Deval Patrick finally got the tax holiday bill from state lawmakers and on Tuesday signed it, officially declaring that Massachusetts shoppers won't have to pay state sales tax on certain items purchased on Saturday, Aug. 11, and Sunday, Aug. 12.

But Massachusetts can be cut some slack for its slowness in OKing the tax-free event since it's pretty generous in what's available during the sales tax holiday.

The state's usual 6.25 percent sales tax won't be collected on most items purchased for personal use that cost $2,500 or less.

Of course, before you go madly running to stores, checkbook or debit/credit card in hand, note the word "most." That means, says the Massachusetts Department of Revenue, that the following do not qualify for tax-free treatment:

• Motor vehicles, including motorboats
• Restaurant meals
• Telecommunications services
• Natural gas, steam and electricity (sorry, Steampunks)
  
• Tobacco products

And about that big price limit: Don't be tempted to exceed the $2,500 price limit. It won't do you any tax-saving good.

The Massachusetts tax office says that when the sales price of any single item is greater than $2,500 then sales or use tax is due on the entire price charged for the item.

You're not allowed to avoid sales tax on $2,500 and pay tax on just the amount over that. So if an item sells for $3,000, you owe tax on $3,000, not just $500.

Still, you can get a lot for $2,500 with the possible maximum $156.25 tax savings per item a nice bonus.

Georgia, Maryland shoppers get tax breaks, too: Massachusett's late entry into the 2012 sales tax holiday parade brings to three the number of states holding no-tax events this weekend.

Georgia shoppers get Friday, Aug. 10, and Saturday, Aug. 11, to find items exempt from the state's 4 percent sales tax. Tax-free featured products are school supplies of $20 or less, clothing and footwear of $100 or less and computers and computer accessories costing $1,000 or less. The price limits are per item.

Maryland kicks off its sales tax holiday on Sunday, Aug. 12, but Old Line State shoppers get more than just one weekend day. The state's tax holiday runs through Saturday, Aug. 18. During that week, clothing and footwear items costing $100 or less each are exempt from Maryland's 6 percent sales tax.

Be a savvy tax-free shopper: I know I offered tax-free shopping tips last week when the bulk of the 2012 back-to-school tax holidays were held and I don't want to be too repetitive (or too much of a nag), but I hear that some folks do go a bit overboard when they enter department stores.

So here again are a few key things to remember.

Don't go crazy just because some things are tax-free. Check your state's tax holiday website page (the state name links above will take you there) as to what's tax-free and what's not tax-free.

Make a list of the tax-free items you plan to buy.

Stick to that list.

That's it. I'm through nagging reminding.

A few holidays to come: We're about to head into the August sales tax holiday home stretch.

Connecticut and my home state of Texas also have events coming up. As previously promised, when those days near, you'll find details here on the ol' blog.

You also might find these items of interest:

• Tax holidays: Bonanzas or bogus?
• State use taxes tend to be useless
• State Tax Departments