Strategies for Making the Most of Sales Tax Holidays

How can I find out if my state is having sales tax holiday this summer, and how can I make the most of this break?

A total of 17 states are having a sales tax holiday this summer, with the majority offering the break during the first weekend in August. The first sales tax holiday of the season is July 27-28 in Mississippi; the last is August 19-25 in Connecticut.

Sales tax holidays don’t let you off the hook on sales taxes across the board, but they do let you buy certain items without having to pay the tax, which generally ranges from 4% to 7%. The tax holiday can be a great opportunity to get a head start on back-to-school shopping, or to stretch your dollars even further on end-of-season clothing sales and computer purchases. Here are a few strategies to make the most of this break.

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Before you shop, know what types of items the sales tax holiday covers in your state. School supplies and clothes are generally covered, but your state may have a specific list of eligible items. For example, both Virginia and Alabama have long lists of the school supplies that count. Some states, such as Georgia, Missouri and North Carolina, exempt computer purchases from sales tax during the holiday, too. North Carolina’s holiday also includes any sports equipment that costs $50 or less per item. Louisiana doesn’t limit the list to specific types of purchases. Instead, it offers the tax break on the first $2,500 of the purchase price on most personal-property items. (See our Guide to 2012 Sales-Tax Holidays for links to each state’s dates, along with detailed lists and rules.)

Be careful about per-item limits. Many states limit the break to clothes and school supplies that cost less than $100 per item. In those states, your total can add up to more than $100 as long as each item costs less than that. So if you bought five jackets that cost $90 each, for example, all of them would be exempt from state sales taxes, even though the total would be $450. But if one jacket was $150, you’d have to pay sales tax on the full $150 for that jacket (although any other items that cost less than $100 would be exempt). Also, be sure to note the limits for computers in your state. North Carolina and Missouri exempt computer purchases of up to $3,500 from state sales taxes, but Georgia and New Mexico limit the break to computers that cost less than $1,000 (New Mexico also lets you exempt related computer hardware that costs up to $500).

Find out about other sales tax holidays. Georgia will have a second sales tax holiday from October 5 through October 7 specifically for energy-efficient and weather-efficient products priced at $1,500 or less per item; Virginia has a similar break October 5-8 on Energy Star and WaterSense purchases priced at $2,500 or less each. Louisiana and South Carolina usually have sales tax holidays on guns and hunting supplies in time for hunting season (in September and November, respectively). Alabama and Louisiana have sales tax holidays for hurricane-preparedness items around the beginning of hurricane season, on June 1. Alabama’s tax holiday is in early July; Louisiana’s is in late May. See the Federation of Tax Administrators tax-holiday page for more information about these sales tax holidays.