2019-07-26 12:44:18 Sales Tax English The August heat brings more than sun shine. August also brings a wave of sales tax holidays. https://quickbooks.intuit.com/r/us_qrc/uploads/2019/07/The_August_back-to-school_sales_tax_holiday_wave_is_coming_featured.jpg https://quickbooks.intuit.com/r/sales-tax/the-august-back-to-school-sales-tax-holiday-wave-is-coming/ The August back-to-school sales tax holiday wave is coming

The August back-to-school sales tax holiday wave is coming

2 min read

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:

State Date Qualifying Items Thresholds
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!

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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