Maryland's Tax-Free Week is in effect. Here's what to know.
Maryland's Tax-Free Week is underway, giving shoppers the chance to purchase certain items without paying the state's 6% sales tax.
The exemption ends at 11:59 p.m. on Saturday, Aug. 16.
Eligible items include clothing and footwear priced at $100 or less, plus the first $40 of backpack and book bag purchases. The Maryland General Assembly designated clothing, footwear, and backpacks as eligible for the August tax-free period.
What qualifies for tax-free status
Qualifying items priced at $100 or less include:
- Sweaters
- Shirts
- Slacks
- Jeans
- Dresses
- Robes
- Underwear
- Belts
- Shoes and boots
- Backpacks and bookbags (first $40 only)
Each qualifying item selling for $100 or less will be exempt, regardless of the total purchase amount. Two $60 sweaters sold together are both exempt, even though the total exceeds $100.
However, if a single item costs more than $100, sales tax applies to the entire amount. A $110 suit is taxable on the full $110, not just the amount over $100.
How online sales work
Online purchases can qualify for the exemption if items are paid for and delivered to Maryland customers during the tax-free period.
Items also qualify if customers order and pay during the period and retailers accept orders for immediate shipment, even if delivery occurs after the period ends.
Items on backorder or those where retailers do not charge until shipment after the tax-free period do not qualify.
Layaway and exchange policies
Customers starting layaway agreements during the tax-free period can apply the exemption to eligible items placed on layaway during that time.
For exchanges, no additional tax applies when swapping an item for the same item in a different size or color. However, returning items for credit toward different purchases after the tax-free period requires paying full sales tax on the new items.
Customers returning pre-period purchases during the tax-free week and using credit for eligible clothing face no sales tax.
You can get more information on Maryland Tax-Free Week at www.marylandcomptroller.gov.
