The Massachusetts sales tax holiday: how retailers should prepare

Key takeaways

• The 2026 Massachusetts sales tax holiday was held on Saturday, August 8 and Sunday, August 9, 2026, set by the Legislature in resolutions H.5495 and S.3119 adopted on June 11, 2026.
• During the holiday, the 6.25% Massachusetts sales tax does not apply to a single retail item priced at $2,500 or less that an individual buys for personal use, according to the Department of Revenue (DOR).
• An item priced above $2,500 is taxed on its full price, so a $3,000 item is fully taxable under DOR regulation 830 CMR 64H.1.8.
• Participation is mandatory: every Massachusetts business that normally makes taxable sales of tangible personal property and is open on the holiday must sell eligible items tax free.
• No 2027 dates were set as of November 13, 2026. M.G.L. c. 64H, s. 6A gives the Legislature until June 15 to name the August weekend, and the Commissioner of Revenue until July 1 if it does not.

This guide is for owners and managers of shops, showrooms and online stores in Boston and the cities and towns around it. The Massachusetts sales tax holiday is a Saturday and Sunday in August when the state’s 6.25% sales tax does not apply to most retail items priced at $2,500 or less that individuals buy for personal use. The state sets the dates and rules, so they are the same in Boston, Cambridge, Somerville and Brookline. If you normally collect sales tax and you open that weekend, you must take part.

The sections below cover the 2026 dates and how the 2027 dates get set, the $2,500 cap, the items that stay taxable, the rules for deposits, layaway, special orders and online orders, how coupons and bundles change the math, and how to report the weekend to the Department of Revenue.

When is the Massachusetts sales tax holiday?

The Massachusetts sales tax holiday for 2026 took place on Saturday, August 8 and Sunday, August 9, 2026. The House and Senate adopted resolutions H.5495 and S.3119 on June 11, 2026, according to a press release from the Massachusetts Legislature. The text of House No. 5495 names August 8 and 9 as the holiday for 2026 under section 6A of chapter 64H of the General Laws.

Dates for 2027 had not been set as of November 13, 2026. Under M.G.L. c. 64H, s. 6A, the General Court (the Legislature) adopts a joint resolution by June 15 each year that names a Saturday and Sunday in August. If the Legislature misses that date, the Commissioner of Revenue names the weekend by July 1.

What is the price cap for the sales tax holiday?

The price cap for the sales tax holiday is $2,500 per single item. A single item priced at $2,500 or less is exempt. A single item priced above $2,500 is taxed on the entire price, according to the Department of Revenue’s sales tax holiday FAQ (page updated June 11, 2026).

The cap applies item by item, so a customer can buy several items on one invoice tax free as long as each one is priced at $2,500 or less, even when the total is higher.

How clothing works

Clothing is the one exception to the full-price rule. In an ordinary week, Massachusetts taxes clothing only on the amount above $175 per item. On the holiday, a clothing item priced at $2,500 or less is fully exempt. On a clothing item above $2,500, the first $175 is still deducted and the rest is taxed. The regulation’s example is a $2,550 wedding dress, taxed on $2,375.

What does not qualify for the sales tax holiday?

Items that do not qualify for the sales tax holiday are listed in M.G.L. c. 64H, s. 6A and in DOR regulation 830 CMR 64H.1.8. You keep charging 6.25% on these all weekend:

• Meals, including take-out food and drinks from a restaurant
• Alcoholic beverages
• Tobacco products, including electronic nicotine delivery systems
• Marijuana and marijuana products
• Motor vehicles, including snow vehicles and recreation vehicles
• Motorboats, including jet skis
• Telecommunications services and prepaid calling cards
• Natural gas, steam and electricity
• Any single item priced above $2,500

Business purchases are also outside the holiday. The exemption covers items bought by individuals for personal use. A purchase by a corporation or other business, or by an individual for business use, stays taxable, and the regulation tells vendors to charge tax on purchases paid with a business credit card or business check.

Some items near the line do qualify under the regulation: cell phones bought for nonbusiness use, and canoes, kayaks and rowboats priced at $2,500 or less.

Do retailers have to take part in the sales tax holiday?

Retailers have to take part in the sales tax holiday if they normally make taxable sales of tangible personal property in Massachusetts and are open on either day. The Department of Revenue calls participation mandatory. Section 6A says a vendor may not charge or collect sales tax from a nonbusiness buyer on an eligible sale during the holiday. Out-of-state vendors registered to collect Massachusetts sales and use tax must take part too.

Do deposits, layaway and special orders qualify?

Deposits, layaway and special orders qualify only when the customer orders and pays in full on a holiday day. Regulation 830 CMR 64H.1.8 sets these timing rules:

• Prior sales: an order with a deposit, prepayment or binding promise to pay made before the holiday is not eligible, even if the balance is paid on the weekend.
• Layaway: a layaway sale started before the holiday is not eligible, even if the final payment falls on the weekend.
• Special orders: furniture and similar items ordered and paid in full on the holiday are exempt at $2,500 or less, even when delivered later.
• Rain checks: an item bought with a rain check qualifies only if the rain check is used on a holiday day.
• Rentals: a rental of 30 days or less qualifies if paid in full on the holiday. Motor vehicle and motorboat rentals never qualify.

Payment counts when you receive cash, a check or a money order, when a card payment or authorization is processed, or when third-party financing is arranged. Financing by the seller does not count as payment in full.

You may not cancel and re-book an earlier sale, by hand or through software, to move it into the weekend. The regulation says back-dating or forward-dating sales can bring tax evasion penalties under M.G.L. c. 62C, s. 73.

Do online orders qualify for the sales tax holiday?

Online orders qualify for the sales tax holiday when the customer orders and pays on a holiday day, measured in Eastern Daylight Time. Authorizing a credit card on your website at checkout counts as ordering and paying that day. Delivery can happen after the weekend. The regulation’s example is a $2,000 computer ordered and charged at 1:00 p.m. on the holiday Saturday, which is exempt even if it arrives 30 days later.

How do coupons, rebates and bundles affect the $2,500 cap?

Coupons, rebates and bundles affect the $2,500 cap because the cap is tested against the actual sales price. Regulation 830 CMR 64H.1.8 handles each case this way:

Situation	How the cap is tested
Store coupon or store discount	The discounted price is tested against $2,500.
Discount on the whole bill	You allocate the discount pro rata across the items, then test each one.
Manufacturer’s rebate applied at the register	Treated as a cash discount, so the reduced price is tested.
Mail-in rebate received after the sale	The price is not reduced. The full purchase price is tested.
Package sold for one price	The package price is tested as a single item.

Items that are normally bundled and sold as one unit cannot be priced separately to get under the cap. A $3,500 computer package is taxable. A printer priced and sold separately for $200 is exempt even when the $3,000 computer beside it is not.

How do retailers report sales tax holiday sales to DOR?

Retailers report sales tax holiday sales on Line 2, “Exempt Sales,” of the August Sales and Use Tax Return, according to the Department of Revenue. Section 6A keeps every reporting requirement in place during the holiday. DOR’s sales and use tax guide (updated May 7, 2026) says a monthly Form ST-9 is due on or before the 30th day following the month covered, and that returns are filed through MassTaxConnect.

Vendors must keep books and records under M.G.L. c. 62C, s. 25 that support both the exempt and the taxable sales made on the two days, including the date, items and selling price of business purchases.

What if you charge sales tax by mistake or a customer returns an item?

Sales tax charged by mistake on an eligible holiday sale must go to the Department of Revenue or back to the customer; you cannot keep it. DOR tells customers to bring the receipt to the store that made the sale for a refund. If you already sent the tax to DOR, you can file an amended return after you have refunded or credited the customer.

Returns and exchanges follow two rules in 830 CMR 64H.1.8:

• Even exchanges: swapping a holiday purchase for an identical or similar eligible item at the same price is not taxed, even after the weekend.
• Returns: for 90 days after the holiday, you may not refund sales tax on a returned item unless the customer’s receipt or your own records show tax was paid.

What should you recheck before you act?

Each item below was checked on November 13, 2026 against the source named.

• 2027 dates: not set as of November 13, 2026. Watch the Massachusetts Legislature for a joint resolution by June 15, 2027, or DOR for a designation by July 1, 2027.
• The $2,500 cap and the excluded items: written into M.G.L. c. 64H, s. 6A. Confirm on malegislature.gov that the section has not been amended.
• The 6.25% rate and the $175 clothing threshold: confirm in DOR’s sales and use tax guide.
• Line 2 on the August return and the ST-9 due date: confirm in MassTaxConnect and in DOR’s FAQ, which DOR updates each summer.
• Questions about one sale: DOR’s Contact Center lists (617) 887-6367, Monday through Friday, 9 a.m. to 4 p.m.

This guide is general information, not legal or tax advice. Rules and fees change; confirm the current requirements with the agency named before you file or pay.

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