Sales Tax Holidays

Robin Hall
Posted by Robin Hall on Aug 26, 2021 12:02:10 PM

In a previous post we discussed how our home state of Texas has for many years allowed for a tax-free weekend on purchases focused on clothing and schools supplies. This weekend typically occurs in late July or early August shortly before children return to school. Curiosity got the better of us and we decided to find out which other states have tax-free periods and what kinds of purchases are exempt during those time periods.

It turns out that many states have these weekends or weeks. A popular exemption is clothing and school supplies, but many states use these time periods for additional exemptions the state deems worthy.

Reviewing tax laws in our home state of Texas, we found that, in addition to the back-to-school sales tax holiday, there is also a tax exempt weekend for Emergency Preparedness Supplies, which includes certain preparation supplies, portable generators priced less than $3,000.00 and Hurricane shutters and emergency ladders priced less than $300.00. The energy star tax holiday exempts from sales tax Energy Star air conditioners priced at $6,000.00 or less, Energy Star refrigerators priced $2,000.00 or less and other lower priced products. Finally, Texas holds a tax holiday for water-efficient products labeled “WaterSense” with no price restrictions. These products can be purchased for both residential and business use.

Here are details on other states.

Alabama

Alabama has a back to school weekend when clothing, books, computers and software, and school supplies can be purchased without sales tax. Alabama also has a severe weather preparedness weekend where various supplies valued at less than $60.00 and generators sold for $1,000.00 or less are tax free. Retailers are required to participate in these tax exempt weekends. Depending on the location, local tax may apply.

Arkansas

Arkansas holds a back to school tax free weekend in August when clothing priced less than $100.00 is exempt. Electronics and school supplies, with no price restrictions, are also tax exempt. All retailers are required to participate when selling qualifying items.

Connecticut

During one week in August, clothing and footwear are exempt from state sales tax. Note that Connecticut has no local sales tax.

Florida

Florida has three tax exempt periods during the year, with all three occurring in the summer. For disaster preparedness, during the first week of June reusable ice, flashlights and lanterns, some radios and batteries, portable power bands, tarps and ground anchor systems, and generators within certain price constraints are tax exempt. Later in the summer, recreational supplies and admissions, such as annual state park passes, boating, camping, and fishing supplies, and sports equipment are tax exempt with various price caps. Finally, in late summer, qualifying clothing, shoes, and backpacks priced $60.00 or less are tax exempt, as are computers and related accessories priced at less than $1,000.00.

Iowa

In Iowa, clothing and footwear priced under $100.00 is exempt from state and local sales tax for 2 days in August. Note that all businesses that are open on these two days are required to participate and are not permitted to advertise that they store will pay or absorb any sales tax required on purchases of non-qualifying items.

Louisiana

An oddity on this list is Louisiana, which prior to 2018 had three annual sales tax holidays, but an act passed by their legislature that year temporarily cancelled these holidays until June 30, 2025. However, the Second Amendment holiday remained in effect. Qualifying items, such as ammunition, firearms, and hunting supplies may be exempt from local sales tax in some areas, but state sales tax applies.

Maryland

In Maryland, they have a sales tax holiday in February for Energy Star products with no price restrictions. Maryland also has a Shop Maryland Tax-Free Week when clothing and footwear priced at $100.00 or less are tax free. Also, the first $40.00 of backpacks and bookbags is exempt from sales tax. All vendors, including online sales sites, must participate in the tax holiday.

Massachusetts

Massachusetts holds a sales tax holiday in August when all businesses, including online vendors, must participate. Single items of personal property sold for $2,500.00 or less are exempt from sales tax.

Mississippi

Mississippi has a sales tax holiday aimed at back to school purchases with clothing, footwear, and specified school supplies priced less than $100.00 being tax exempt. This state also has a Second Amendment weekend when ammunition, firearms, and certain hunting supplies are tax exempt with no price restrictions. These tax holidays apply to state and local sales tax.

Missouri

Missouri has a Show-Me Green sales tax holiday in April when Energy Star products priced at $1500.00 or less are exempt. They also have a back to school tax holiday when clothing, computers and accessories, software, graphing calculators, and school supplies with varying price valuations are tax exempt. These holidays apply to state sales tax. Some localities also participate.

New Mexico

New Mexico has a back to school tax holiday where various items with various price points, such as clothing, computers, computer accessories, and school supplies are tax exempt. Note that retailers are not required to participate in the back to school tax holiday. New Mexico also has a Small Business Saturday gross receipts tax holiday. On this one day the state suspends collection of gross receipts tax on sales of qualifying items at certain small businesses. During that time the law provides a deduction from gross receipts for retail sales of qualifying personal property sold for less than $500.00.

Ohio

The state of Ohio has a back to school sales tax holiday when clothing, school supplies, and instructional materials with varying price points are tax exempt. All retailers are required to participate and both state and local sales tax is exempted.

Oklahoma

Oklahoma has a back to school tax holiday when clothing and shoes sold for less than $100.00 are tax exempt.

South Carolina

South Carolina has a back to school tax holiday when clothing and shoes, computers and accessories, school supplies, and certain bed and bath items are tax exempt. There are no price restrictions on qualifying items.

Tennessee

Tennessee has a sales tax holiday for gun safes and gun safety devices. This state also has a food sales tax holiday when for a specified period of time retail sales of food and ingredients, as well as prepared foods are tax exempt. Tennessee also has a back to school tax holiday that covers clothing, computers (but not software), and school and art supplies are tax exempt. Various price limits apply.

Virginia

Virginia has a three-in-one sales tax holiday when a number of product categories are tax exempt on the same weekend. For the kids, clothing and shoes $100.00 or less are exempt. Energy Star and WaterSense items sold for $2,500.00 or less are exempt. Preparedness items, such as chainsaws, generators, and other specified hurricane supplies are exempt with certain price restrictions. This holiday applies to state and local taxes.

West Virginia

West Virginia has a back to school tax holiday when clothing and shoes, computers, instructional materials, school supplies, and sports equipment are tax exempt, subject to certain price restrictions.

Here is an important reminder

A final note on remote sellers. 43 states, DC, and many localities in Alaska require out-of-state sellers to register and collect/remit sales tax. These sellers are not permitted to charge sales tax on qualifying goods during sales tax holidays in each of the aforementioned states.

Given the complexity of collecting and remitting sales tax in these states, it is recommended that both retail and service businesses subject to state sales tax employ a Certified Service Provider to help them navigate the ins and outs of sales tax collection.

Topics: Sales Tax


 

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