Carnival of Personal Finance #163
New housing bill is now law

Tax holidays 2008 start this weekend

Attention shoppers! Back-to-school sales tax holidays are about to start.

Sales_tax_holiday_2008This year, 14 states and the District of Columbia are holding sales tax holidays.

Georgia kicks it off tomorrow, with a four-day no-tax shopping extravaganza. Those of us in Texas and Massachusetts* have to wait a couple of weeks for our tax-free trips to local stores.

Most of these events typically are characterized as back-to-school sales and exempt apparel and school supplies, including computers, from sales tax. But Massachusetts* and Louisiana are incredibly generous. They waive their state sales taxes on most items as long as they cost less than $2,500.

And in many cases, municipalities and other tax districts also forgo collection of their levies during the holiday.

The table below lists alphabetically the 15 jurisdictions holding sales tax holidays in August. Click the locale links for more details on each event.

2008 Back-to-School Tax Holidays
Click on the state name to go to the official tax holiday Web page.
State Dates Tax-exempt Items
Alabama August 1-3 Clothing ($100 or less per article); computers, software and school computer supplies ($750 or less); school supplies (up to $50 per item); books (up to $30 each)
Connecticut August 17-23           Clothing and footwear (up to $300 per item)
District of Columbia August 2-10 School supplies, clothing, accessory items and shoes ($100 or less)
Georgia July 31 - Aug. 3 School supplies (up to $20 per item); clothing and footwear ($100 or less per article); and computers and computer-related accessories (a single purchase of $1,500 or less).
Iowa August 1-2 Clothing or footwear ($100 or less per item)
Louisiana August 1-2 Most tangible personal property costing $2,500 or less; purchases of vehicles, meals and certain services remain taxable,
Massachusetts* August 16-17 Most items costing $2,500 or less; purchases of vehicles, meals and certain services remain taxable,
Missouri August 1-3 Clothing and footwear ($100 or less); school supplies ($50 or less); computer software ($350 or less); personal computers and computer peripherals ($3,500 or less)
New Mexico August 1-3 Clothing or shoes ($100 or less); certain computers ($1,000 or less), and associated peripheral equipment ($500 or less); certain school supplies (less than $15); and book bags, backpacks, hand-held calculators, maps and globes (less than $100)
North Carolina August 1-3 Clothing ($100 or less); school supplies ($100 or less); school instructional materials ($300 or less); sports and recreation equipment ($50 or less); computers ($3,500 or less); and computer supplies ($250 or less)
Oklahoma August 1-3 Clothing and footwear (less than $100)
South Carolina August 1-3 Clothing, clothing accessories, footwear, school supplies, computers, printers, printer supplies, computer software, and bedroom and bath linens (no price limit)
Tennessee August 1-3 Clothing ($100 or less); school supplies ($100 or less per item); and personal computers ($1,500 or less)
Texas August 15-17 Clothing and footwear (less than $100)
Virginia August 1-3 Clothing and shoes ($100 or less); school supplies ($20 or less per item)

*The Massachusetts House and Senate approved a 2008 sales tax holiday and sent it to Gov. Deval Patrick on July 23 (blogged here). UPDATE July 31, 2008: Patrick has signed the bill. The link above is to the Massachusetts Department of Revenue home page. It has not yet created a 2008-specific Web page, but this year's holiday, like all since the law was first created in 2004, follows these guidelines.

Double check your tax-free shopping list: As veteran sales tax holiday shoppers know, the descriptions of exempt items noted in the table are general guidelines.

In addition to restricting tax-free purchases by price, most states also have specific product lists of eligible items. Some of these tax-free vs. taxable designations are as entertaining as they are -- what's a good word? -- interesting.

Yeah, that's it. Interesting, like in Iowa, where belts without buckles are taxed during its two-day tax holiday, but a belt with a buckle attached is tax-free.

I'm not picking on the fine folks in the Hawkeye State. They're definitely not alone in this regard. So be sure to check your state's official product list before you hit the mall.

Additional holidays on the horizon: This is only the latest batch of tax-free holidays.

Some states held no-tax days in the spring (blogged here).

Five more jurisdictions will hold sales-tax holidays in the fall. You can get a preview of those events in this post (scroll down to the second table).

Tell us about your shopping trip: We'd like to know how sales tax free holidays affect you.

Does your state, or one near enough to drive to even with today's gas prices, have a tax holiday?

Do you put off purchases until then?

Do you end up buying taxable items, too?

How much do you typically save by not paying sales tax?


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Michael Rozbruch

Thanks for the great breakdown of tax-exempt items by state. I linked to it from my tax help blog. Check it out!

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