Back-to-school shopping guidelines
Maryland Tax-Free Week rolls around each August as a perfect opportunity for parents to save while they’re back-to-school shopping for their kids. As noted by the Maryland Comptroller’s Office, from Sunday, August 11 through Saturday, August 17, “qualifying clothing and footwear priced $100 or less will be exempt from Maryland’s six percent sales tax. The first $40 of back/bookbag sales also qualify.”
Here’s what you need to know to make the most out of Maryland Tax-Free Week:
What clothing items can I buy tax-free?
As long as the following items are priced $100 or less, they may be purchased tax-free:
- Sweaters
- Shirts
- Jeans
- Dresses
- Robes
- Underwear
- Belts
- Shoes
Unfortunately, accessory items are not tax-free, even if they are priced under the defined limit. Accessories include, but aren’t limited to, jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, and belt buckles. Furthermore, if a clothing item is priced over $100, you must pay sales tax as normal. There is no discount on sales tax for the first $100 of a clothing item. Any special clothing or footwear primarily designed for protective use or not intended for everyday use, such as athletic gear like knee pads, are not tax-exempt.
What if I have a coupon or there’s a discount on the item?
Coupons and discounts may be offered and can be used during tax exemption week. If a store-offered discount brings the price of an eligible item under $100, it will qualify for tax exemption. Only retailer-issued coupons can reduce the price of an eligible item and make it tax-exempt. Third-party and manufacturer coupons may be used, but will not qualify an item for tax exemption.
What if a set being sold contains a taxable and non-taxable item?
Sets are tricky. Whether or not you will have to pay taxes on a set that features a shirt and a handkerchief, for example, depends on how the pricing is being distributed. If the handkerchief is given as a free item when you purchase a qualifying shirt, the purchase will be tax-exempt. However, if the price for the non-qualifying item in the set is not specified, the purchase may not qualify for tax exemption.
The Comptroller’s office gives the following example: “If a boxed gift consisting of a shirt (otherwise exempt) and tie (taxable) is sold for a single price of $80, the full price of the boxed gift set is taxable because the tie is taxable and the sale price of the shirt is not separately stated.”
Does #ShopMDTaxFree apply to online orders?
Yes, as long as the retailer charges and ships the order within the tax-free period.
After tax-free week, if you are exchanging an item for the same item (in a different size or color, for example), no additional tax will be due. Have more questions? Check out these frequently asked questions from the Maryland Comptroller.
Sources:
https://www.marylandtaxes.gov/divisions/comp/Shop_Maryland_Tax-free_Week/Tax_Free_Week_Facts.pdf
https://marylandtaxes.gov/divisions/comp/Shop_Maryland_Tax-free_Week/Tax-Free-Week-Faqs.pdf
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