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Maryland's 2017 Back-To-School Sales Tax Holiday

Consumers can purchase certain clothing, footwear and accessories priced at $100 or less exempt from Maryland's 6% sales tax during Shop Maryland Tax-Free Week ("Shop Maryland Week"), from August 13th through August 19th2017. Maryland also provides an exemption for the first $40 of backpack or bookbag purchases.

What you should know about Shop Maryland Week

Maryland is one of 16 states that offer a back-to-school sales tax holiday for 2017. But please note the following limitations that may be unique to the Maryland sales tax holiday:

  1. The Maryland Comptroller's website provides a detailed list of those clothing, footwear and accessory items that are eligible for the sales tax exemption.
  2. Otherwise eligible items that cost more than $100 will be fully taxable.
  3. Except the first $40 of a backpack or bookbag purchase is tax-exempt regardless of the total price.
  4. For the purchase of multiple items: Each qualifying item selling for $100 or less, or the first $40 of a backpack or bookbag purchase will be exempt from Maryland sales tax, no matter how many items are purchased at the same time.
  5. Layaway purchases or online sales may potentially qualify for the exemption as long as the purchase is completed during the Shop Maryland Period.
  6. Discounts or coupons that reduce the sales price of a qualifying item to $100 or less will also qualify the item for exemption, if the purchase is completed during the Shop Maryland Period.
  7. By comparison, rebates typically occur after the sale and, therefore, will not affect the sales price for purposes of the $100 exemption threshold.
  8. Sales of sets including both exempt and taxable items are fully taxable, unless the price of the exempt item(s) is separately stated.
  9. Items of clothing, footwear or accessories that are normally sold as a set (such as a matched suit or a pair of shoes) cannot be priced separately to qualify for the $100 exemption threshold.
  10. Businesses are not required to do any special recordkeeping for exempt sales during Shop Maryland Week

Refunds of Overpaid Maryland Sales Tax

Businesses are generally encouraged to refund any erroneously withheld sales tax directly to their customers/consumers. However, consumers that have improperly paid

Maryland sales tax on qualifying exempt items may alternatively request a refund themselves by completing a sales and use tax refund request form.

Kundra & Associates can provide expert counsel on state sales tax audit and compliance matters, both in the Maryland-D.C. Metro area, and throughout the United States.

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Friday, November 18, 2016

Chaya Kundra will be a panelist at the New England IRS Representation Conference on Preparer Penalties.

Preparer Penalties: Everything You Need to Know! Over time the IRS has increased its focus from individual taxpayers to tax preparers. When the IRS identifies a pattern of false or fraudulent returns, it does not hesitate to impose penalties on the return preparers. This panel will walk you through the various penalties and what preparers need to know to protect themselves.

Moderator: Amanda Evans, Green & Sklarz LLC, New Haven, CT

Panelists: Chaya Kundra, Kundra & Associates, Rockville, MD, Barbara Kaplan, Greenburg Traurig, New York, NY

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