Maryland’s tax-free shopping week began Sunday and continues through Aug. 14. What do you need to know before heading out to the mall to take advantage of Maryland’s tax free week?
- Maryland’s tax-free holiday week exempts clothing and footwear costing less than $100 from state sales tax.
- The $100 limit is a per item limit, not a cumulative limit.
- If a retailer’s coupon reduces the price to under $100, the item qualifies for tax-free treatment. However, a manufacturer’s coupon for an item costing $100 or more does not reduce the sales price, and thus would not qualify the purchase for tax-exempt treatment. Rebates likewise do not affect the sale price of the item.
- Maryland publishes a list of tax exempt items.
- Unlike certain other states’ tax free holidays, Maryland does not exempt school supplies (notebooks, glue sticks, pencils, etc.) from taxation.
- However, individual retailers may choose to offer tax-free school supplies or items not included on Maryland’s exemption list by absorbing the sales taxes themselves. This is referred to as seller’s privilege, and is a new feature to Maryland’s tax-free week this year.
- Backpacks are not among the items eligible for tax-free treatment during Maryland’s tax-free week.
- A ta- free period on Energy Star products and solar water heaters will be available Feb. 9 through Feb. 21, 2011. These products are not exempt from taxation during Maryland’s tax-free shopping week Aug. 8-14.
Finding good deals during Maryland’s tax-free week requires an understanding of what items qualify for tax-free treatment, how the seller’s privilege works, and knowledge of customary sales prices for the items being purchased.
Reading about items one would not normally associate with tax-free week in Maryland and planning to stock up on them is one strategy that may help buyers who are struggling in this tight economy.
Another strategy is to carry a description of the seller’s privilege page from the Maryland Comptroller’s website. Presenting this page to sellers of school supplies and other non-exempt items may encourage a retailer to offer tax-free treatment on non-exempt items.
If a retailer runs out of a tax-exempt item, a rain check will not qualify the purchaser for tax-exempt treatment after the tax-free week 2010 has concluded. However, a buyer may use rain checks issued prior to tax-free week to buy tax-exempt items between Aug. 8 and Aug. 14.
Layaways initiated during tax-free week are tax exempt, so if you are looking to save on a winter coat or other item that you can’t pay for in full this week, it may be advantageous to place the item on layaway.
Back-to-school-shopping season is normally the second most profitable time of year for retailers. With a recent national survey showing that families are scrimping on back to school spending in 2010, Maryland’s retailers are waiting to see if 2010 tax-free week fulfills its promise.