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Deal of the Day by Kelli B. Grant (Author Archive)
Sales Tax Holidays
READY FOR BACK-TO-SCHOOL SHOPPING? You can cut your bill by up to 12% by taking advantage of state sales tax holidays. This year, 13 states (plus the District of Columbia) have announced such holidays for late July and August, eliminating the sales tax on clothing, school supplies and computers.
Consider local sales tax. "Even though you won't be paying state sales tax, you could be paying local tax," says Dan Schibley, a state tax analyst with CCH, a tax information and software provider. In Alabama, for example, several cities — including Trussville, Homewood and Pleasant Grove — have opted to continue charging their portion of the tax. Even without state sales tax, local taxes can add up: Residents of Campaign, Tenn., regularly pay sales tax at a rate of 2.75% for the county and 2% for the city, plus, of course, the 7% state sales tax.
Watch out for loopholes. Not every retailer may be participating. In New Mexico, retailers are not required to participate. And several states — including Florida and Georgia — don't include purchases from retailers in theme parks, airports, hotel and entertainment complexes in their tax-free promotions.
Check your receipt. Participating in a sales tax holiday may require a retailer to re-program its system or create codes for employees to key in. "A retailer could make an error very easily," says Schibley.
* Cost per item unless otherwise noted.
Here's how to get a good deal:
Consider local sales tax. "Even though you won't be paying state sales tax, you could be paying local tax," says Dan Schibley, a state tax analyst with CCH, a tax information and software provider. In Alabama, for example, several cities — including Trussville, Homewood and Pleasant Grove — have opted to continue charging their portion of the tax. Even without state sales tax, local taxes can add up: Residents of Campaign, Tenn., regularly pay sales tax at a rate of 2.75% for the county and 2% for the city, plus, of course, the 7% state sales tax.Watch out for loopholes. Not every retailer may be participating. In New Mexico, retailers are not required to participate. And several states — including Florida and Georgia — don't include purchases from retailers in theme parks, airports, hotel and entertainment complexes in their tax-free promotions.Check your receipt. Participating in a sales tax holiday may require a retailer to re-program its system or create codes for employees to key in. "A retailer could make an error very easily," says Schibley.State Sales Tax Holidays | |||
| Dates | State | Tax Savings | Items* |
| July 22-30 | Florida | 6% to 7% | $50 or less: Books, clothing, shoes and accessories.
$10 or less: School supplies. |
| Aug. 3-6 | Georgia | 4% to 7% | $1,500 or less: A single purchase consisting of computers, computer accessories and/or energy-efficient products.
$100 or less: Clothing and shoes. $20 or less: School supplies. |
| Aug. 4-5 | Iowa | 5% to 7% | $100 or less: Clothing and shoes. |
| Aug. 4-6 | Alabama | 4% to 9% | $750 or less: A single purchase consisting of computers, software and/or computer supplies.
$100 or less: Clothing. $50 or less: School supplies and instructional materials. $30 or less: Books. |
| Missouri | 4.2% to 8% | $3,500 or less: Computers and computer accessories.
$350 or less: Computer software. $100 or less: Clothing and shoes. $50 or less: School supplies. | |
| New Mexico | 5% to 7.6% | $1,000 or less: Computers.
$500 or less: Computer accessories. $100 or less: Clothing and shoes (but not athletic or protective clothing), book bags, backpacks, calculators, maps and globes. $15 or less: Notebooks, paper, writing instruments, crayons, art supplies, paper clips, staples, staplers, scissors and rulers. | |
| North Carolina | 4.5% to 7.1% | $3,500 or less: Computers
$250 or less: Computer accessories. $100 or less: Clothing (but not accessories or athletic clothing) and school supplies. $50 or less: Sports and recreational equipment. | |
| South Carolina | 5% to 7% | Any price: Clothing, shoes, accessories (but not jewelry), school supplies, computers, printers, printer supplies, computer software and bed and bath linens. | |
| Tennessee | 7% to 11.8% | $1,500 or less: Computers.
$100 or less: Clothing and school supplies. | |
| Texas | 6.3% to 8.3% | $100 or less: Clothing and shoes (but not athletic or protective clothing and accessories). | |
| Virginia | 4% to 5% | $100 or less: Clothing and shoes.
$20 or less: School supplies. | |
| Aug. 5-13 | District of Columbia | 5.75% | $100 or less: School supplies, clothing, accessories and shoes. |
| Aug. 12-13 | Massachusetts | 5% | Proposed holiday. (Measure had not yet been enacted as of publication date.) During the 2005 holiday, most items costing $2,500 or less were tax-free. |
| Aug. 20-26 | Connecticut | 6% | $300 or less: Clothing and shoes (but not athletic or protective clothing, jewelry and other accessories). |
| Aug. 23-27 | Maryland | 5% | $100 or less: Clothing and shoes (but not accessories). |
Tax-Free Every Day
A sales-tax holiday is great, but there's plenty you can do to circumvent the sales tax on a regular basis.
States that don't charge sales tax: Alaska (up to 1.15% in local sales tax), Delaware, Montana, New Hampshire and Oregon.
State exemptions: Depending on where you live, you may regularly be exempt from paying tax on certain items. Many states, including Minnesota, skip the sales tax on food, prescription drugs and nonprescription drugs. Minnesota, for example, exempts all three. New York doesn't charge sales tax on clothing and shoes that run $110 or less per item. And Connecticut regularly exempts clothing and shoes that cost $50 or less. Click here for a full list.
Buy online. Not every retailer charges sales tax. For more, see our column Skipping the Sales Tax.
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Posted: 1:13 PM EST August 15, 2006
Posted by: Zhora102
I would like all states to have a tax break for back to school. It would be nice to have extra funds for school activities ie. fundraisers If we had saved on clothing for school. I live in one of the most expensive states California and there is never enouogh extra to give when we have our schools fundraisers which pays for all of the functions of the school like extra materials that arent covered by the school district all of the field trips that should be part of our childrens education.
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