Next week, what will Maryland have in common with Alaska, Delaware, Montana, New Hampshire and Oregon? No sales tax. But remember, it’ll just be for a week here. The other five states offer that perk all year long.
It’s all true. Maryland, the not-so Free State, which in 2008 jacked up its retail sales tax from 5 cents on the dollar to 6%, is laying off that key on the cash register from this Sunday, Aug. 11, through Saturday, Aug. 17. And although it falls on the calendar in the nick of time for folks to start their back-to-school shopping, almost all school supplies themselves don’t qualify for the break during Shop Maryland Tax-Free Week.
Comptroller Peter Franchot (D), the state’s top elected bean counter, is fully supportive of the tax-free week. That’s because it benefits businesses in Charles County and across our state while saving consumers some money at the same time. During this period, selected clothing and footwear items are exempt from Maryland’s 6% sales tax.
Here’s how it works: Qualifying articles of clothing $100 or less are exempt from the sales tax, no matter how many items are purchased at a single time. For example, a shopper could buy two qualifying items for $95 each and would still receive the waived sales tax despite the total amount exceeding $100. Also, the first $40 of the price of a backpack or book bag is eligible.
And if a business is selling an item that doesn’t qualify for the tax exemption, that retailer is still free to offer the items without the sales tax as long as it pays the tax owed to the state for the customer. The onus is on the business in that case, not the consumer.
Also, if an item is purchased during the tax-free week but is returned after the week finishes, no additional tax would be due if the item were exchanged for the same item in a different size or color. If the item were returned for store credit on the purchase of a different item, the customer would pay the full sales tax for the new item. However, if the item were purchased before the tax-free week and then returned during the week for store credit on different items, the customer does not have to pay the sales tax.
But rain checks for items not in stock would be subject to the regular 6% sales tax later.
For a third consecutive year, Franchot has joined with the Maryland Retailers Association to announce a social media contest during Shop Maryland Tax-Free Week, in which two winners will receive scholarships — one for $2,500, the other for $1,000 — to any Maryland university, college or trade school. Shoppers can like or follow the official social media pages on Facebook, Twitter and Instagram, then snap a fun selfie or other picture, or shoot a video. After that, they’re invited to write a creative caption and use #shopmdtaxfree during the tax-free week to submit an entry on any or all of the social media platforms. The MRA, which is paying for the scholarships, will pick the winners.
The state might lose a bit of money from the tax collections next week, but the stimulus to buy should be a win for businesses and consumers alike.
“Shop Maryland Tax-Free Week is a great opportunity for parents to get deals on back-to-school clothes and for anyone to refresh a tired wardrobe,” Franchot said in a release.
So for those who have put off back-to-school clothes shopping until now, this might turn out to be the one time it pays to procrastinate a little bit.