State Sales Tax Holidays – How to Make the Most of The Opportunity

State Sales Tax Holidays - How to Make the Most of The Opportunity

In America, for specific weekends, or sometimes even an entire week, some state governments declare a ‘sales tax holiday’ on certain items they deem essential for their residents.

However, not every American state offers these tax holidays.

In fact, the list of states that take part and the tax exemptions they offer vary slightly every year. The dates, duration of the holiday, and qualifying products also vary from state to state.

Around 16 states offer these tax-free weeks and weekends every year in the U.S.

Most of them offer it only once annually, around the start of the new school year. A few states have multiple tax-free holidays for various categories of products throughout the year.

So, familiarize yourself with the dates and details of the sales tax holidays in your state, or states nearby, to make the most of these days. Stay updated with this year’s list with a quick Google search.

Depending on the state you’re shopping in, you can get anywhere between 4% off (in Alabama) to 7% off (in Tennessee) while shopping during these sales tax holidays.

If you’re excited and ready to make the most of these days, then keep reading.

4 Sales Tax Holidays:

1. Back-To-School Sales Tax Holidays:

This is probably the most popular sales tax holiday in the U.S., and in some states, it’s just called the “Sales Tax Holiday.”

States that offer this holiday waive taxes on most essential back-to-school supplies. Depending on the state you’re in, this can include stationery, clothes, backpacks, and even shoes within certain price ranges. With technology becoming more and more integral to education, some states are canceling taxes on basic tech like laptops and PCs.

These offers are a great way for parents and college students to save on school supplies by skipping the sales tax. A 2021 survey found that the average parent is expecting to spend around $268 per child for back-to-school shopping, so saving those tax dollars could add up to extensive savings for families.   

Most of these back-to-school tax holidays start in August, but in a few states, like Alabama, these weekends begin as early as July. These tax-free days tend to add on to the general back-to-school sales that retailers offer, making the deals extra sweet.

2. Sales Tax Holidays on Energy-Efficient Products:

This is an effort by a few states to encourage the purchase of environmentally friendly products. They offer to waive sales tax for a few days on qualifying appliances that display the Energy Star logo.

These can include products like energy-efficient air conditioners, refrigerators, ceiling fans, lightbulbs, dishwashers, dehumidifiers, and even washing machines. Again, the price and specs for a product to qualify for tax exemption vary from state to state, so do your research before making a purchase.

3. Sales Tax Holiday for Emergency/Disaster/Severe Weather Preparedness:

A few states, like Alabama, Florida, and Texas offer their residents a chance to grab emergency equipment tax-free for a few days every year. States like to have this tax-free weekend to help families to stay prepared and safe for when severe weather strikes.

Again the actual list of qualified products varies from state to state and changes every year, but generally, they include things like portable generators, tarps, and flashlights.

4. Second Amendment Sales Tax Holiday:

These sales aren’t as popular, but they are definitely a reason for gun aficionados to rejoice. States like Mississippi and Louisiana have a few days of tax-free shopping on guns, ammunition, and gun safety equipment.

Apart from these major events, there are a few other unique tax-free weeks and weekends in the U.S.

For example, Florida has a tax-free week for recreational supplies, and New Mexico hosts a ‘Small Business Saturday’ to support local entrepreneurs every year. So, keep an eye open for these special days in your area.

While you make plans to grab those deals, here are some things you need to know to make the most of these special days:

Tips for Sales Tax Holidays

1. Know the Price Thresholds for Your State

Each participating state publishes an annual list of eligible items for its tax holidays. These lists contain details of the maximum price limits for each product.

Going through these beforehand will save you the heartache of finding out the price when you’re paying at the checkout counter.

Alabama’s back-to-school weekend, for example, has clothing priced $100 or less as tax-exempt. Whereas Florida exempts taxes for qualifying clothing, footwear, and backpacks that are priced at $60 or less.

2. Know the List of Items That Are Eligible For the Offer

Sometimes the details for these offers can be hard to understand. Aside from the ever-changing list of categories that qualify for the offer, pay attention to the specifications as well.

For example, a pair of sneakers may qualify for a tax holiday, but a specialized pair of cowboy boots might not.

3. Overspending for a Discount Will Not Get You Any Savings

Waived taxes may not save you all that much for some small items. With 4-7% tax in most states, you’ll probably only save about $4 – $7 on a $100 shirt.

That said, if electronics or other big-ticket items qualify during your state’s tax-free period, then you will probably get much larger savings.

Keep this in mind while shopping on tax-free holidays, so you don’t go overboard and buy unnecessarily with the lure of tax-free shopping. It’s advisable to go in with a set budget so you don’t overspend, and you only buy things you were planning to get anyways.

Pro tip: Be sure to look for other discounts and offers in stores and online while you shop.

Other Options

Now, if you don’t happen to live in any of the states that offer these sales tax holidays, we’ve got your back. Here are a few quick tips on how you can get extra savings even if your state doesn’t do tax holidays.

1. You don’t have to be a resident of a participating state to take advantage of their tax-free weekends.

If you live within driving distance, or are planning a holiday to one of them around the tax-free weekend, you can make the most of these weekend savings. Also, most states like Oklahoma and Massachusetts have now extended the tax waiver to local online shopping sites as well. So, you can buy from local retailers in those areas to save some extra money.

2. Use a cashback credit card for your online shopping to maximize your savings whenever you shop. A solid cashback card can give you as much as 5% cashback on your shopping.

3. Whether you have a tax exemption or not, you can always use additional discount coupons. Using those coupons, browser extensions, and money-saving apps, especially while shopping online, can save you a pretty penny.

4. For electronics, save money by buying refurbished products. A quality product should work as good as new, and you can save up to 30-50% off the original price. But, be sure to buy them only from trusted retailers to get a long-lasting product. Now with all those pointers wrapped up, what are you waiting for? Get cracking on that shopping list, so you’re all set to go when the next tax holiday comes around.

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