Tax Edge

Back-to-school shopping will be tax-free on various dates this July and August in 15 states and the District of Columbia, according to Online Tax Solutions, Inc. and a leading provider of tax, accounting and audit information, software and services. During these "tax holidays," back-to-school items such as clothing, footwear, school supplies, computers and, in a few states, many other items may be purchased free of state sales tax. Local sales taxes may continue to be imposed in some places, however.

"Although states are facing serious budget issues, they seem to be reluctant to cancel their tax holidays as a way to increase revenue," said Daniel Schibley, TaxEdge senior state tax analyst. "In fact, 'hard times' may be seen as a justification for these holidays, both as 'relief' for hard-pressed consumers and 'stimulus' for hard-pressed retailers."

This year, Mississippi has joined the ranks of states offering a tax holiday timed for back-to-school purchases. Massachusetts has not yet enacted a budget, so an August tax holiday is still a possibility. Its 2008 mid-August tax holiday was not signed into law until August 1 last year.

2009 Back-to-school Holidays

Holidays timed for back-to-school shopping begin as early as July 31 this year. While some limit the exemption to clothes and shoes, others, such as those in Louisiana and Vermont, are quite broad in their reach, covering a wide range of personal items.

Alabama: On August 7, 8 and 9, the following are exempt: clothing with a sales price of $100 or less per item; single purchases, with a sales price of $750 or less, of computers, computer software, school computer equipment; noncommercial purchases of school supplies, school art supplies, and school instructional materials with sales price of $50 or less per item; and noncommercial book purchases with sales price of $30 or less per book are exempt from tax. However, clothing accessories and protective or recreational equipment are not exempt.

Connecticut: On August 16 to 22, clothing and footwear costing less than $300 per item are exempt. However, accessories and athletic or protective clothing are not exempt.

District of Columbia: On August 1 to 9 and November 27 to December 6, clothing, footwear, accessory items and school supplies costing $100 or less per item are exempt.

Georgia: On July 30 to August 2, noncommercial purchases of school supplies (up to $20 per item), clothing or footwear ($100 or less per article or pair) and personal computers and related accessories (single purchases of $1,500 or less) are exempt.

Iowa: On August 7 and 8, clothing and footwear with sales prices of less than $100 per item are exempt. However, accessories, rentals and athletic or protective clothing are not exempt.

Louisiana: On August 7 and 8, the first $2,500 of the sales price of noncommercial purchases (not leases) of items of tangible personal property (not vehicles or meals) is exempt. However, it does not apply to local taxes (except possibly in St. Charles Parish).

Mississippi: On July 31 and August 1, clothing and footwear with sales prices under $100 per item are exempt. However, accessories, rentals, skis, swim fins and skates are not exempt.

Missouri: On August 7, 8 and 9, noncommercial purchases of clothing (but not accessories) with taxable value of $100 or less per item; school supplies up to $50 per purchase; computer software with taxable value of $350 or less; and computers and computer peripherals up to $3,500 are exempt. Localities may opt out. If less than two percent of a retailer’s merchandise qualifies for exemption, the retailer must offer a refund of sales tax paid if the customer requests one, in lieu of the tax holiday.

New Mexico: On August 7, 8 and 9, footwear and clothing with sales prices of less than $100 per item; school supplies; computers with sales prices of $1,000 or less per item; and computer peripherals with sales prices of $500 or less per item are exempt. Retailers are not required to participate. Accessories and athletic or protective clothing are not exempt.

North Carolina: On August 7, 8 and 9, clothing and school supplies with sales prices of $100 or less per item; school instructional materials with sales prices of $300 or less per item; sport/recreational equipment with sales prices of $50 or less per item; computers with sales prices of $3,500 or less; and computer supplies with sales prices of $250 or less per item are exempt. Clothing accessories or protective clothing are not exempt.

Oklahoma: On August 7, 8 and 9, items of clothing and footwear with sales prices of less than $100 are exempt. However, accessories, athletic or protective clothing, and rentals are not exempt.

South Carolina: On August 7, 8 and 9, clothing (but not rentals), clothing accessories, footwear, school supplies, computers, printers, printer supplies, computer software, bath wash clothes, bed linens, pillows, bath towels, shower curtains and bath rugs are exempt.

Tennessee: On August 7, 8 and 9, clothing (but not accessories), school supplies and school art supplies with sales prices of $100 or less per item and computers with sales prices of $1,500 or less per item are exempt.

Texas: On August 21, 22 and 23, clothing and footwear and school backpacks with sales prices of less than $100 per item are exempt. However, accessories, athletic or protective clothing, and rentals are not exempt.

Vermont: On August 22, items of tangible personal property sold to individuals for personal use at a sales price of $2,000 or less are exempt. A similar holiday is scheduled for March 6, 2010.

Virginia: On August 7, 8 and 9, clothing and footwear with sales prices of $100 or less per item; school supplies with sales prices of $100 or less per item; and school supplies with sales prices of $20 or less per item are exempt.

Holidays for Varied Purposes

In addition to holidays timed for back-to-school buying, usually restricted to back-to-school items, a number of states have enacted tax holidays to promote other kinds of purchases. Energy efficiency is the most common theme. Missouri and Texas have already held energy-efficiency holidays in April and May of this year. Georgia, North Carolina, Virginia and West Virginia have such holidays scheduled for this fall. Louisiana and Virginia continued to hold tax holidays for hurricane-preparedness supplies in the spring of this year. Florida had such a holiday in 2007, but dropped it last year.

Two states have firearms-related tax holidays. Louisiana's covers firearms, ammunition, and a broad range of "hunting supplies." It will be held each year on the first consecutive Friday through Sunday of September. South Carolina provides an annual tax holiday for sales of handguns, rifles and shotguns during what is dubbed "Second Amendment Weekend" on the Friday and Saturday following Thanksgiving.

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Posted July 22, 2009.