Families with children in elementary and high school are expecting to spend on average of $864 on back-to-school clothes, supplies, electronics and other items this summer, up 24% from the $697 they figured to spend in pre-pandemic 2019, according to an annual survey by the National Retail Federation.
With inflation now the highest in 40 years, parents are using a variety of strategies to save money, with 40%-plus saying they’re doing more comparative shopping online or searching out sales and more than a third saying they’re trading down to store or generic brands. Only 24% (up from 13% in 2019), said they’d make their kids use last year’s items, while 38% said they’d cut back elsewhere to outfit their progeny.
But residents of some states have another, less painful way to save–if they time their purchases right. Between today and the end of August, 17 states will be staging back-to-school sales tax holidays covering everything from clothing to school supplies to even, in some cases, computers and electronics, according to a running tally of all sales tax holidays kept by the Federation of Tax Administrators. (For details, see the map and list below.)
Starting today and for the next two weeks, Floridians can avoid that state’s 6% sales tax on computers (purchased for personal use) costing up to $1,500, articles of clothing costing up to $100 and certain supplies costing up to $50. Buying online? So long as the order is placed during the two week period for immediate delivery, it should be tax exempt, Florida says–even if it doesn’t arrive until after the holiday is over.
But be forewarned: most of these holidays are shorter than the Florida break. Tennessee and Mississippi both begin holidays from their 7% sales taxes this coming Friday; Tennessee’s lasts for three days and Mississippi’s for just two. (A description of each state program is below, along with links to each state’s web sites with all the details.)
Sales tax holidays have been around for decades and in recent years have spread to cover everything from energy efficient appliances to hurricane preparation materials to guns, ammo and hunting supplies. But by far, the most common holidays are for back-to-school shopping.
While parents and politicians may like the holidays, some tax experts aren’t fans.
“Sales tax holidays are definitely politically popular, and it’s easy to see why people like not having to pay taxes on their purchases for a weekend,” says Janelle Fritts, a policy analyst at the Tax Foundation. “But in reality, they distract from real and permanent tax reform.”
In fact, thanks to federal stimulus aid and a still strong economy, many states had big (albeit, possibly temporary) surpluses this year and used them to either cut taxes or send stimulus checks to citizens.
Sales tax holidays can be a nuisance for retailers. Since just a few items like school clothing, and other school supplies taxes are exempt for a weekend, “retailers and sales tax holidays are very complicated,” said Scott Peterson, vice president of US Tax Policy and Government Relations of Avalara, which sells sales tax compliance software. (In other words, his company actually benefits from the complexity since it makes software necessary.) In addition, economists question if the holidays really goose more spending or simply move around when the spending is done.
Regardless, if you have purchases planned, it’s worth checking the map and list below and (if your state has a holiday planned) timing your sales accordingly. As Peterson notes, “there’s not always a direct correlation between a sales tax holiday and a high rate” and the holidays are most common in the Southeastern states. California, for example, has a 6% state sales tax, plus local and county levies that take the rate up to 9.5% in Los Angeles. It’s got no sales tax holiday planned although the state is using its surplus to send “inflation relief” stimulus checks of up to $1,050 to approximately 23 million residents.
States with holidays are shown in blue. Hover over your state to find out the list of tax exemptions during the back-to-school tax holiday.
Here’s the list of 17 states offering tax relief in the following weeks on back-to-school items, according to the Federation of Tax Administrators:
- Arkansas (August 6-7) Exemptions apply to purchases of clothing and footwear ($100 or less, per item), clothing accessories ($50 or less, per item), school supplies, art supplies, sport or recreational equipment and school instructional supplies
- Connecticut (August 21-26) Exemptions apply to purchases of clothing and footwear ($100 or less, per item), wigs for medically diagnosed total or permanent hair loss are exempt from tax, and safety apparel items are taxable.
- Florida (May 14-August 14) All children’s books from K-12 grade are all exempt from state taxes. (July25 – August 7) Exemptions apply to purchases of clothing, footwear and certain accessories ($100 or less, per item), certain school supplies ($50 or less, per item), learning aids and jigsaw puzzles ($30 or less, per item), personal computers and certain computer-related accessories ($1,500 or less, per item). (July 1, 2022 – June 30,2023) Exemption applies to purchases of children’s diapers and baby and toddler clothing, apparel and shoes.
- Illinois (August 5-14) Reduced tax rates from 6.25% to 1.25% (5% decrease) in qualifying clothing and footwear purchases ($125 or less, per item).
- Iowa (August 5-6) Exemptions apply to purchases of clothing and footwear ($100 or less, per item), the tax exemption does not apply to an item selling for $100 or more.
- Maryland (August 14-20) Exemptions apply to purchases of clothing, footwear and qualifying accessories ($100 or less, per item), the tax exemption does not apply to an item selling for $100 or more.
- Massachusetts (August 13-14) Exemptions apply to purchases of sales ($2,500 or less per item); the tax holiday does not apply to: meals, motor vehicles, motorboats, telecommunication services, gas, steam, electricity, tobacco products, marijuana and marijuana products, alcoholic beverages and any time whose price is more than $2,500.
- Mississippi (July 29-30) Exemptions apply to purchases of sales of clothing, footwear and school supplies ($100 or less, per item). Any items priced at $100 or more are subject to the regular tax rate at 7%.
- Missouri (August 5-7) Exemptions apply to purchases of sales of clothing ($100 or less, per item), school supplies ($50 or less, per item), computer software ($350 or less, per item), personal computers ($1,500 or less, per item), computer peripheral devices ($1,500 or less, per item) and graphing calculators ($150 or less, per item).
- New Mexico (August 5-7) Exemptions apply to purchases of clothing and shoes ($100 or less, per item), desktop, laptop, tablets and notebook computers ($1,000 or less, per item), computer hardware related items ($500 or less, per item), school supplies ($30 or less, per item).
- Ohio (August 5-7) Exemptions apply to purchases of clothing ($75 or less, per item), school supplies ($20 or less, per item), school instructional material ($20 or less, per item).
- Oklahoma (August 5-7) Exemptions apply to purchases of clothing or footwear ($100 or less, per item).
- South Carolina (August 5-7) Exemptions apply to purchases of school supplies used in a classroom or home school assignments, qualified bed and bath supplies, clothing and footwear, new and used computers and computer accessories.
- Tennessee (July 29-31) Exemptions apply to purchases of clothing ($100 or less, per item), school supplies ($100 or less, per item) and computers ($1,500 or less, per item).
- Texas (August 5-7) Exemptions apply to purchases of clothing, footwear, school supplies and backpacks ($100 or less, per item).
- Virginia (August 5-7) Exemptions apply to purchases of clothing ($100 or less, per item), and school supplies ($20 or less, per item).
- West Virginia (August 5-8) Exemptions apply to purchases of clothing ($125 or less, per item), school supplies ($20 or less, per item), sports equipment ($150 or less, per item), computer-tablet ($500 or less, per item).