By some estimates, Americans spent close to $900 per person on back-to-school shopping last year. Wouldn’t it be great to save money on that this year? Well, it is possible when you figure out a way to avoid paying sales tax without breaking the law. Enter the state sales tax holiday.
Legal times when you can avoid paying sales tax
What are state sales tax holidays? Exactly what they sound like: A designated day, weekend or week when certain purchases are exempt from sales tax.
The most popular time of the year for states to hold these holidays is in summer. That’s when the majority of back-to-school shopping sales tax holidays occur. Many happen over a weekend, so some people call them tax-free weekends. Given rising prices on just about everything, being able to save a little bit of money in the form of no taxes can help millions of families.
States with sales tax holidays
In 2024, 18 states have sales tax holidays in July and August. The list of states ranges from Alabama and Arkansas to Texas and Tennessee. While most of the states with these tax holidays are in the South, not all are. Two New England states offer a time for tax-free shopping. That would be Connecticut and Massachusetts. Maryland has a tax-free shopping week. In the Midwest, Ohio, Iowa and Missouri offer tax holidays.
Kansas resident Sage Scott frequently shopped during the Missouri sales tax holiday. That’s because traveling to Missouri was never a hardship and the savings were worth it. “We live about 20 minutes from Missouri and have participated in their tax holiday since it began in 2003,” said Scott who writes the Everyday Wanderer blog. “We’d get our shopping lists ready the night before, then get an early start to be sure we were the first people through the door at our favorite Target just over the state line in Martin City. We’d hit the school supplies first so we could shop the freshly stocked shelves.”
Categories for back-to-school sales tax savings
As Scott mentioned, school supplies are a biggie during sales tax holidays. This includes notebooks, paper and the like but also backpacks and calculators. Shoppers can also save tax on back-to-school clothing, textbooks and some computer equipment.
There is usually a spending limit for each category. So, smart shoppers like Scott, who has four children, would make multiple purchases at Target so as not to go over the category spending limit. “The cashiers are always amazing about helping everyone break down their purchases into multiple transactions so that there is no tax collected on any covered item,” Scott recalled.
Certain states even designate items that you might not associate with going back to class as being eligible for the state’s sales tax holiday. For instance, in Arkansas, aprons and athletic supporters – the kind athletes wear, not people who support teams financially – fall into the tax-free category during the annual tax holiday, held this year on August 3 and 4.
South Carolina’s tax-free weekend includes bed and bath items, just the sorts of things you would need to furnish a college dorm room. The South Carolina tax holiday is August 2-4, 2024.
During the Shop Maryland Tax-Free Week, which this year is August 11-17, 2024, bathing suits, bowling shoes and bridal gowns are all exempt from state sales tax. The catch? They must cost $100 or less.
Areas that opt out of tax holidays
In some states, not every location participates. For example, before stopping their tax holiday in 2018, certain parishes in Louisiana did not participate in the tax-free shopping holiday. The state will resume tax-free shopping holidays in 2025. In the meantime, residents likely travel across state lines for the Texas tax-free weekends that happen three times a year. The back-to-school one is August 9-11, 2024.
In Alabama, there are 67 counties. According to the Alabama Department of Revenue website, during the Alabama tax free weekend, which is July 19-21, 2024, almost half of the state’s counties have opted out. The same has happened during Alabama’s other state sales tax holiday, held each February and focused on severe weather preparedness.
Online shopping
In the past, if you bought something online from a retailer that did not have a physical presence in your state, you could avoid paying sales tax on the purchase. With the rise of online shopping, that hardly happens anymore, thanks to most states implementing something called the use tax. This covers online and out-of-state purchases. The exception to the use-tax rule? When a sales tax holiday is happening. Even Amazon participates in them. “Many taxing jurisdictions require select taxable products to be temporarily exempt from tax on specific dates,” Amazon stated on its sales tax holidays page.
States that don’t tax clothing purchases
A big part of these back-to-school tax holidays is saving on clothing purchases. However, in some states, there is no need to have tax shopping holidays. Why? Because they don’t charge tax on clothing purchases at all.
Currently, five states do not apply sales tax to clothing purchases but do have an overall state sales tax. They are Minnesota, New Jersey, Pennsylvania, Rhode Island and Vermont. It’s important to realize that these tax-free purchases apply to clothing for everyday use. Specialized clothing and accessories, such as wetsuits for surfing or goggles for swimming, are still taxable.
In addition, there are some states where shopping tax-free happens every day of the year and on everything. Those states are Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon. So if you live near or will be traveling to them soon and your state has a high sales tax, it would be wise to stock up during your visit.
Final thoughts
With inflation on the rise and the cost of everything with it, being able to save a little bit of money during the back-to-school season can help so many families. So, if your state or one near you is having a sales tax holiday this summer, get your school supply list ready so you can hit the stores at just the right time to save the most.
Leah Ingram writes about back-to-school shopping on her blog Cost of Shopping.