August is the most popular month for states to offer sales tax holidays. And in the next 7 days, 11 states will be having their annual sales tax holiday
These sales tax holidays usually occur during the back-to-school summer season, when states eliminate sales tax on purchases to encourage parents and others to shop. (Sadly, my own Pennsylvania and nearby New Jersey do not participate. Then again there is never sales tax on clothing purchases in either state.)
In our current economy, saving 5% or 7% or even 8% can add up to a lot of money you won’t have to spend on things you may need to send your kids back to school–or, frankly to stock up on necessities for your everyday life.
To be fair in some instances these are not life-changing deals. That’s because some of the spending limits that states put on items that you can buy tax free are pretty stingy. For example, unless you’re shopping for one child only and you’ve stockpiled extra school supplies over the year, can you really get away with spending just $15 on school supplies (yes, New Mexico and Florida, I’m talking about your limits)?
You’ll notice that most of these sales tax holidays occur over the August 5-7 weekend. However, some states have limited the sales tax holiday to Friday and Saturday only, or Saturday and Sunday only. So please make careful note of which date applies to your state. Also, dollar amounts included are the price per item maximum that are exempt from sales tax, unless explained otherwise. If you buy something more expensive, you will have to pay sales tax on the entire purchase.
Here are the 11 states with sales tax holidays in the next 7 days, in alphabetical order:
- Alabama: August 5-7, 2011
You can shop for four (4) kinds of items in Alabama over the three day sales tax holiday and not pay sales tax. Those items are clothing ($100), computers ($750), school supplies ($50), and books ($30). Note: not every county and municipality in the state participates. Check this list of places in Alabama to see which locales are participating in the sales tax holiday and which are not.
- Arkansas: August 6-7, 2011
This is Arkansas’ first year participating in a sales tax free holiday. As such what you can buy without paying sales tax is limited to just clothing and footwear ($100) and certain school supplies.
- Iowa: August 5-6, 2011
Iowa’s sales tax holiday applies to any clothing purchase costing less than $100 (accessories not included). That means kids and grown-up clothing count. At the same time Iowa has some pretty strict rules that people may try to work around to enjoy tax-free shopping so do your due diligence and study up on Iowa’s sales tax holiday rules before hitting the stores.
- Louisiana: August 5-6, 2011
Unlike other states where the elimination of sales tax is linked to the price of each item, in Louisiana up to $2,500 in spending is allowed to go without sales tax during the two-day sales tax holiday. (Residents will still have to pay local, parish taxes.) This $2,500 amount applies to nearly all consumer goods, from clothing to household appliances. (FYI, Louisiana has a second sales tax holiday in September so residents that are hunters can stock up on hunting supplies.)
- Missouri: August 5-7, 2011
The Show-Me State’s sales tax holiday includes a number of categories and some pretty generous spending amounts. For example, on purchases of computers or computer peripherals (from monitors to modems to multi-use printers), consumers can spend up to $3,500 without paying sales tax. The other items that fall under the tax-free umbrella are clothing ($100), school supplies (spend $50 or less per purchase), and computer software (worth less than $350). Like some other states, some cities and localities have opted out of Missouri’s state sales tax holiday so be sure you’re shopping in a participating place before making your purchase.
- New Mexico: August 5-7, 2011
In New Mexico you can avoid paying sales tax when you buy clothing ($100), computers ($1,000), and school supplies ($15).
- North Carolina: August 5-7, 2011
Teachers and student athletes, along with everyone else shopping for back to school, can benefit from North Carolina’s sales tax holiday. That’s because North Carolina has expanded its “definition” of what qualifies for a tax-free purchase. That list includes: clothing, footwear, and school supplies ($100); school instructional materials ($300); sports and recreational equipment ($50); computers ($3,500); and computer supplies ($250).
- Oklahoma: August 5-7, 2011
Oklahoma’s state sales tax holiday is simple and straightforward–it is limited to shoes and clothing ($100).
- South Carolina: August 5-7, 2011
Unlike some other states South Carolina does not put a price limit on items that are exempt from state sales tax during the sales tax holiday. In fact, the list of which items qualify for the state sales tax exemption–which includes clothing, school supplies, and computers, and much more–is pretty lengthy and explained in detail on the state government’s website.
- Tennessee: August 5-7, 2011
You’ll avoid paying state sales tax in Tennessee during the state sales tax holiday when you purchase clothing ($100), school supplies ($100), and computers ($1,500).
- Virginia: August 5-7, 2011
Only clothing ($100) and school supplies ($20) are eligible during Virginia’s state sales tax holiday. (Virginia will offer another sales tax holiday in October, when Energy Star products, costing $2,500 or less, will be exempt from state sales tax.)
Next week I’ll outline the states with sales tax holidays during the remainder of August.
Most mothers teach their kids to cook and clean. Leah Ingram’s mother taught her to compost. These days she’s passing along this green message to her own daughters as they all try to live a frugal lifestyle. She’s the author of Suddenly Frugal: How to Live Happier and Healthier for Less“Suddenly Frugal:How to Live Happier and Healthier for Less.” Visit her blog, Suddenly Frugal.