Sales Tax Holidays are short periods of time, 1-3 days or maybe a week, throughout the year when a list of items is exempt from sales tax. Each state can set its own dates, set its own lists of exempt items, and set its own dollar thresholds. Sales tax holidays most commonly exist for back to school clothing, footwear, and school supplies, hurricane preparedness, or energy-efficient items.
Sales tax holiday, fun for consumers.
The first traditional sales tax holiday took place in New York in January 1997. Local governments were given the option of whether to participate and most of them said no!
Since 1997, nearly 25 states have held a holiday. Holidays can either get written into state law and occur on an annual basis or need legislative approval and a governor’s signature each year. Very few states –Missouri, Tennessee, Alabama — allow locals to opt out.
Are sales tax holidays fun for small business?
Sales tax holidays seem so great when you look at them from a consumer perspective. After all, who wouldn’t want to save 2-10% without a coupon? These holidays can, however, cause big headaches for retailers, especially when only specific categories of items are exempt or if thresholds apply. In these cases, it can be difficult to keep track of what does and does not qualify for an exemption and when or how to start taxing after a threshold has been met.
Sales tax holidays are also very well publicized, so consumers are expecting qualifying items to be tax-free at checkout without a hassle. Automated sales tax solutions such as QuickBooks Sales Tax can help by offering functionality that handles all of the nuances of sales tax holidays.
What is coming up this August?
So far in 2019, we have seen 6 spring and 3 summer sales tax holidays. The big wave is still coming and we will see 13 more before Labor Day! Below is a list, in order by start date, of the places you will see the exemptions flying this August:
|Florida||August 2-6||School supplies, clothing, footwear, accessories, computers and computer-related accessories||$15, $60, $1,000|
|Iowa||August 2-3||Clothing and footwear||$100|
|Missouri||August 2-4||School supplies, clothing and footwear, graphing calculators, personal computer software, personal computer or computer peripheral devices||$50, $100, $150, $350, $1,500|
|New Mexico||August 2-4||School supplies, clothing and footwear, computers equipment, and computer hardware||$30, $100, $500, $1000|
|Ohio||August 2-4||School supplies and school instructional material, clothing and footwear||$20, $75|
|Oklahoma||August 2-4||Clothing and footwear||$100|
|South Carolina||August 2-4||Clothing, footwear, accessories, school supplies, computers, printers, computer software, bath and bed linens and supplies||No threshold|
|Virginia||August 2-4||School supplies, hurricane and emergency preparedness items, clothing and footwear, WaterSense, Energy Star products||$20, $60, $100, $100, $2500|
|Arkansas||August 3-4||Clothing and footwear, clothing accessories and equipment, school supplies||$100, $50, no threshold on school supplies|
|Texas||August 9-11||Limited school supplies, clothing and footwear||$100|
|Maryland||August 11-17||Clothing and footwear||$100|
|Massachusetts||August 17-18||All tangible personal property||$2500|
|Connecticut||August 18-24||Clothing and footwear||$100|
If you live in one of these states, get your lists ready and circle the dates on your calendar so you don’t miss out. This is a once a year opportunity. Happy shopping!