The start of school is just around the corner and that means Maryland tax-free week is upon us.
The state will waive its usual 6% sale tax on certain clothing items and shoes this week until Saturday to boost back-to-school shopping. The annual event, which usually occurs during the second week of August, resulted from legislation the Maryland General Assembly passed in 2007.
As prices continue to rise nationwide, Comptroller Brooke Lierman said she hopes the tax-free week will help consumers who feel like they’re paying more for less.
“My hope is that this temporary relief helps boost customer traffic and sales for our local businesses and purchasing power for shoppers in Maryland,” she said in a statement.
During tax-free week, the Bureau of Revenue Estimates projects the state will lose about $6.6 million in revenue, according to the comptroller’s office. Last fiscal year, the state lost about $6.5 million.
What is eligible for tax-free purchases?
Any clothing, footwear, belts, shoes and boots under $100 are eligible.
The first $40 of backpacks and book bags will also be tax free, but any amount beyond that will be taxable. If a backpack is $41, for example, the sales tax is due on the $1. So the total would be $40.06.
Keep in mind that many accessories, including jewelry, watches, handkerchiefs and ties, will still be subject to sales tax, as will clothing designed for protective use, such as football pads. Other school supplies, such as pencils, notebooks and lunch boxes, will not be tax free.
Also, pay attention to boxed gift sets. If they contain an item that isn’t eligible, like a tie or necklace, the full price of the boxed set will be subject to sales tax.
What happens if my total purchase is more than $100?
It should still be tax-free if each article of clothing or footwear is less than $100.
Can I shop online for tax-free week?
Yes. As long as you pay for an eligible item and the retailer accepts it for immediate shipment, you should be good.
If an item is back-ordered and the retailer doesn’t charge you until after tax-free week when it’s available to ship, you’ll have to pay sales tax.
What about clothing alterations? Will they be tax free?
Clothing alterations and any items used to make or repair clothes — such as zippers and buttons — will still be taxable.
Can I use coupons during tax-free week?
Yes. Shoppers can use store coupons that drop the prices of shoes and clothing below $100, making them eligible for tax-free week.
However, the coupon or discount must be from a store or retailer, not a manufacturer. For example, if you want to buy a pair of Nike shoes from Kohl’s, and use a coupon to drop the price below $100 so the shoes are exempt from sales tax, the coupon must be from Kohl’s, not Nike.
Manufacturers’ coupons are treated as a form of payment and are deducted after calculating sales tax, according to the comptroller’s office.
Can I return items?
No additional tax will be due if you are exchanging the item for the same item, even if it’s after the tax exemption period. But if you return an item for credit on a different item following the exemption period, you will have to pay the full sales tax on the new item, according to the comptroller’s office.
