‘Tis the Season for Back to School Tax Breaks!


Quite a few years ago, my sister-in-law talked me into taking four kids, ranging in age from grade school to junior high, and spending four days in a mall.  Yes, I spent four days of my vacation in a mall – and it wasn’t just any mall, it was the second largest mall in the United States.  Mall of America, near Minneapolis, covers almost 97 acres!  Seven Yankee Stadiums will fit inside this mall! 40 million people visit this mall each year!  There is an amusement park in the middle of this mall!

Anyone that knows me well knows I don’t “do” malls, and I don’t like large crowds.  I don’t shop at Wal-mart, I shop small local stores as much as possible.  My common sense flew right out the window at the look on the young faces when they heard the trip proposal, so we packed kids, luggage, and ourselves in a van and headed out at 7 AM one morning.

I was dumbstruck when, after checking into the hotel at 3:30 PM and flopping on the very comfortable, very inviting bed, my sister-in-law popped her head through the connecting door and screamed, “Let’s go to the mall!”  (You’re kidding, right?  I just drove 8 hours in a van to get here, and you want to go to the mall?  Now?  You’re joking!  No? You’re not joking?)

We all got back in the van.  We all went to the mall.

Save sales tax on back to school items!   Learn how at The Budget Professional! School was due to start in a few weeks, and my kids needed school clothes and shoes.  The first store we hit was Old Navy, and jeans were on sale!  I bought each kid enough jeans for a year, and when I got to the checkout the total was enough to make the monthly payment on a luxury car.  But, the sales clerk congratulated me on saving so much on sales tax.  I had no clue that Minnesota was having a sales tax holiday that weekend, which meant that all clothing, school supplies, and computer purchases had the normally assessed sales tax waived.  The savings on our purchases that weekend quickly added up.

A few years later, the state I live in started holding sales tax holidays, usually a few weeks before schools were due to start classes.  Cities and towns use the sales tax holiday as an incentive to lure shoppers into stores.  Merchants stock shelves and hang sale signs in anticipation of seeing larger crowds than normal.  A lot of shoppers will plan and wait to make large purchases, such as desktop and laptop computers, in order to save sales tax.  If a laptop computer is priced at $2,000, and the local tax rate is 9%, that is a savings of $180 in sales tax.  Quite a savings when coupled with back to school clothes and school supplies for multiple children.

Most states put a limit on what kind of items are exempt from sales tax during these tax holidays, and the tax exemptions are usually limited to clothing, shoes, school supplies, computers, computer equipment, software, and text books.  Each state will also put a dollar limit on what can be purchased – in Missouri, for example, the dollar limit on a personal computer is $3,500, whereas the state of Texas does not have computers listed as an allowable item for sales tax exemption during their tax holiday.

Sales tax holidays have been expanded in recent years to include energy efficient home appliances, hot water heaters, air conditioners, or hurricane preparedness items such as generators and supplies.  A few states also add hand guns, rifles, and ammunition as allowable purchases during these tax holidays.  Each state has different rules, so make sure you know what is allowed and what is not before you set out on your shopping trip.

Local municipalities can and do exempt themselves from sales tax holidays.  Just because the state allows the holiday does not mean the town where you live must participate.  The village where I live, for example, exempted themselves from the state sales tax holiday, using the reasoning that the city could not afford to lose the sales tax on those purchases.  I think the city lost a lot more than they would have by participating in the holiday, because most people that live here simply traveled 5 or 10 minutes down the road to the next suburb and spent their money in a town that waived sales tax on what they bought during those sales tax free days.

The following states will soon hold State Sales Tax Holidays:

  • Alabama  August 3-5
  • Arkansas  August 4-5
  • Connecticut  August 19-25
  • Florida  August 3-5
  • Georgia  August 10-11
  • Iowa  August 3-4
  • Louisiana  August 3-4
  • Maryland  August 12-18
  • Missouri  August 3-5
  • New Mexico  August 3-5
  • North Carolina  August 3-5
  • Oklahoma  August 3-5
  • South Carolina  August 3-5
  • Tennessee  August 3-5
  • Texas  August 17-18
  • Virginia  August 3-5

Please check this link:

2012 State Sales Tax Holidays per the FTA

where you’ll find more info and details on the items available for sales tax exemption, 2012 dates for the sales tax holiday in your state, and links back to each state where you can obtain item lists, sales tax rate schedules, limitations, and more.

In case you have issues with the link above:

Happy shopping!

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  1. gharkness says:

    Not only does Texas not exempt computer equipment from sales tax, but it has an upper limit of $100 per allowed item. So that eliminates the purchases of high-dollar things like specialty sneakers, designer clothing, etc. Or, they can certainly be purchased, but they won’t be exempt from sales tax.

    I always make sure that I get all my shopping done either just before that weekend or just after. Mob scenes are just not my style. If I had four kids, though, that might be a different story. I’ll leave the stores to them!

  2. Madison says:

    Ha, I just looked this up the other day to see if Illinois had one! Nope :( They had it the first year we moved here, but not since.

    I grew up in Minnesota. Minnesota doesn’t tax clothing or food and it’s been that way since I was a kid. Whenever I go back to visit family, I try to buy as much clothes as I can afford. The sales tax in the county I live in is outrageous(10% last I checked). So if you ever go to Minnesota for to visit, definitely stock up on clothes while you’re there.

    And Mall of America for 4 days with a bunch of kids? Oh man, I do not envy you. I like malls but I can only go MoA for one day and only for about 6 hours max. It’s just too big to get all of your shopping done in one trip without getting too tired. Every store I want to go to is on a different floor, and different wing. It’s so annoying.

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