New State Joins List, Others Add Energy-efficiency Incentives
(RIVERWOODS, ILL., July 26, 2012) – As students head into the home stretch of summer vacation, shoppers in several states can expect sales tax breaks on the purchase of various school-related goods in upcoming weeks, according to CCH, a Wolters Kluwer business and a leading global provider of tax, accounting and audit information, software and services (CCHGroup.com). States holding these “tax holidays” temporarily drop state sales tax collections on back-to-school items such as clothing, footwear, school supplies, computers and certain other products. However, local sales taxes may still be imposed in some communities.
“Consumers should be aware of specific information regarding the items that qualify for the holiday, in order to get the greatest tax savings,” said Carol Kokinis-Graves, JD, CCH Senior State Tax Analyst. “Generally, there are a number of restrictions that apply. State departments of revenue often provide administrative guidance that lists, with great detail, the items that are eligible for purchase on an exempt basis during the holiday and items that do not qualify.”
Georgia was the only state to enact a new back-to-school tax holiday for 2012, its first since 2009. Meanwhile, New York State doubled the ceiling on its year-round sales and use tax exemption for clothing and footwear – from $55 in 2011 to $110 starting April 1, 2012.
2012 Back-to-school Tax Holidays
Sales tax holidays timed for back-to-school shopping begin as early as July 27 and many take place in early August. While some limit the exemption to clothes and shoes, others extend exemptions to a wide range of personal items. All place dollar limits on the amount exempt from sales tax, from as little as $15 for school supplies in Florida to as much as $3,500 for computers in Missouri and North Carolina.
Alabama: On Aug. 3-5, the following are exempt: clothing (not accessories or protective or recreational equipment) with a sales price of $100 or less per item; single purchases, with a sales price of $750 or less, of computers, computer software, school computer equipment; noncommercial purchases of school supplies, school art supplies and school instructional materials with a sales price of $50 or less per item; and noncommercial book purchases with a sales price of $30 or less per book.
Arkansas: On Aug. 4-5, the following are exempt: sales of clothing items under $100, clothing accessories or equipment under $50, school art supplies, school instructional materials and school supplies.
Connecticut: On Aug. 19-25, clothing and footwear costing less than $300 per item are exempt. Not included are accessories or athletic or protective clothing.
Florida: On Aug. 3-5, the following are exempt: clothing with a sales price of $75 or less per item and school supplies with a sales price of $15 or less per item. The holiday exemption is inapplicable to sales of such items made within a theme park, entertainment complex, public lodging establishment or airport.
Iowa: On Aug. 3-4, clothing and footwear with a sales price of less than $100 per item is exempt. However, the exemption does not include any special clothing or footwear that is primarily designed for athletic activity or protective use and that is not normally worn except when used for the athletic activity or protective use for which it is designed. The exemption also excludes accessories or the rental of any clothing or footwear.
Louisiana: On Aug. 3-4, the first $2,500 of the sales price of noncommercial purchases (not leases) of items of tangible personal property (not vehicles or meals). Although the holiday exemption does not apply to local taxes, St. Charles Parish will waive its local sales tax during the same weekend as the state holiday.
Maryland: On Aug. 12-18, items of clothing and footwear with a taxable price of $100 or less are exempt. Accessories are not included.
Mississippi: On July 27-28, clothing or footwear (not accessories, rentals, skis, swim fins or skates) with a sales price under $100 per item is exempt.
Missouri: On August 3-5 the following items are exempt: noncommercial purchases of clothing (but not accessories) with a taxable value of $100 or less per item; school supplies up to $50 per purchase; computer software with a taxable value of $350 or less; and computers and computer peripherals up to $3,500. Localities may opt out.
The tax holiday does not apply to any retailer when less than two percent of their merchandise offered for sale qualifies for the holiday. In such a case, the retailer must offer a sales tax refund in lieu of the holiday.
New Mexico: On Aug. 3-5, the following are exempt: footwear and clothing (not accessories or athletic or protective clothing) with a sales price of less than $100 per item; school supplies with a sales price of less than $30 per item; computers with a sales price of $1,000 or less per item; computer peripherals with a sales price of $500 or less per item; book bags, backpacks, maps and globes with a sales price less than $100 per item; and handheld calculators with a sales price of less than $200 per item. Retailers are not required to participate.
New York: Although the state does not provide a sales tax holiday per se, the state does provide a sales and use tax exemption for clothing and footwear. Beginning on April 1 of this year, items of clothing and footwear sold for less than $110 are exempt from the state’s sales and use tax. Through March 31, 2012, such items up to $55 were exempt.
North Carolina: On August 3-5, the following are exempt: clothing and school supplies with a sales price of $100 or less per item; school instructional materials with a sales price of $300 or less per item; sport/recreational equipment with a sales price of $50 or less per item; computers with a sales price of $3,500 or less; and computer supplies with a sales price of $250 or less per item. The exemption does not apply to clothing accessories, any item sold for use in a trade or business, educational software, furniture, luggage, stereo equipment, DVD players, and similar equipment, or protective equipment.
Oklahoma: On Aug. 3-5, items of clothing and footwear with a sales price of less than $100 are exempt. The holiday does not apply to the rental of clothing or footwear, the sale of special clothing or footwear primarily designed for athletic or protective use, or the sale of accessories.
South Carolina: On Aug, 3-5, clothing (but not rentals), clothing accessories, footwear, school supplies, computers, printers, printer supplies, computer software, bath wash clothes, bed linens, pillows, bath towels, shower curtains and bath rugs are exempt.
Tennessee: On Aug. 3-5, clothing (but not accessories), school supplies and school art supplies with a sales price of $100 or less per item; and computers with a sales price of $1,500 or less per item are exempt.
Texas: On Aug. 17-19, clothing and footwear and school backpacks with a sales price of less than $100 per item are exempt. The exemption does not include accessories, athletic or protective clothing or rentals.
Virginia: On Aug. 3-5, clothing and footwear with a sales price of $100 or less per item and school supplies with a sales price of $20 or less per item are exempt.
Tax Holidays for Energy-efficiency, Hurricane Prep Items
In addition to holidays timed for back-to-school buying, a number of states have enacted tax holidays offered at various times throughout the year to promote other kinds of purchases. Energy-efficiency is the most common theme and the three states with upcoming tax holidays for energy and water-efficiency purchases include:
Georgia: On Oct. 5-7, energy-efficient and water-efficient products purchased for noncommercial use with a sales price of $1,500 or less per product are exempt.
North Carolina: On Nov. 2-4, qualified Energy Star products sold for non-business use, including clothes washers, freezers and refrigerators, central and room air conditioners, air-source heat pumps, ceiling fans, dehumidifiers and programmable thermostats are exempt.
Virginia: On Oct. 5-8, noncommercial purchases of Energy Star and WaterSense qualified products with a sales price of $2,500 or less per item are exempt.
Maryland, Missouri and Texas have already held energy-efficiency tax holidays this year.
Hurricane, Severe Weather Preparedness Holidays
Alabama, Louisiana and Virginia held tax holidays for hurricane preparedness items earlier this year.
Firearms Sales Tax Holidays
Louisiana remains the only state that offers a state tax holiday for noncommercial purchases of firearms, ammunition, and hunting supplies. From Sept. 7-9 in Louisiana, such purchases (but not the purchase of animals for the use of hunting) are exempt.
About Carol Kokinis-Graves
Carol Kokinis-Graves is an attorney and a CCH Senior State Tax Analyst specializing in the analysis and reporting of issues regarding state and local sales and use taxes. Kokinis-Graves has written several state and local tax articles, including those that have appeared in State Tax Review, The Journal of State Taxation and Practitioner Perspectives, has been quoted in various publications, and is a speaker on state and local tax issues.
Members of the press interested in speaking with Carol Kokinis-Graves should contact: Eric Scott at 847-267-2179, firstname.lastname@example.org or Brenda Au at 847-267-2046, email@example.com.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading global provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading solutions are The ProSystem fx® Suite, CorpSystem®, CCH® IntelliConnect®, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill. Follow us now on Twitter @CCHMediaHelp. Wolters Kluwer (www.wolterskluwer.com) is a market-leading global information services company. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.