Sales Tax Holiday

August 17 & 18, 2019

Meals included for first time…but not alcohol sold as part of a meal?

Last year’s “Grand Bargain” established in law a permanent annual Sales Tax Holiday (STH) for 2019 and beyond.  By law each year, no later than June 15th, the Legislature shall “adopt a joint resolution designating a weekend in August of that year as the annual sales tax holiday.”  The Legislature has set the 2019 holiday for the weekend of August 17 and 18, 2019.

The DOR has released regulation, 830 CMR 64H.1.8: Sales Tax Holiday, to provide guidance on the holiday, including discussion on how, for the first time, “meals” will be included and tax free for the weekend.  However, alcohol purchased as part of a meal, remains ineligible and still subject to tax.  RAM has long advocated in support of the STH, however we did not request this change.   

Regardless, the law as currently written is clear.  Meals, and non-alcoholic beverages served with meals, are to be exempt from the sales tax during the STH, for the first time this year.  Alcoholic beverages are ineligible and still subject to sales tax during the STH.  The language with regard to the other exclusions remains similar to past years, applying to most single items priced $2500 or less: “For the purposes of the annual sales tax holiday, tangible personal property shall not include telecommunications services, tobacco products subject to the excise imposed by M.G.L. c. 64C, marijuana or marijuana products, as defined in M.G.L. c.  94G, § 1, alcoholic beverages, as defined in section 1 of chapter 138, gas, steam, electricity, motor vehicles, motorboats or a single item the price of which is in excess of $2,500.”            

Meals tax filers are encouraged to begin planning now for the holiday weekend to review POS systems and address any issues that may complicate compliance with the STH rules -- particularly those members who also sell alcohol for on premises consumption.

Members are encouraged to closely review the regulation in its entirety as well as the Frequently Asked Questions (FAQs) that are posted by the MA DOR to maintain compliance with the law.  Also, do not hesitate to contact the RAM office directly with any questions.