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Texas Sales Tax Holiday

  • Aug 15, 2012 | Susan McLain

The Texas Sales Tax Holiday begins Friday, August 17, 2012 and ends Sunday, August 19, 2012.

The law “…exempts most clothing, footwear, school supplies and backpacks priced under $100 from sales and use taxes….”

Eligible Items for Exemption

The following is a sampling of the list of (less obvious) eligible clothing and footwear items:

  • Adult and baby diapers
  • Clerical vestments
  • Employee uniforms
  • Fishing caps and vests
  • Hunting vests
  • Leg warmers
  • Masks, costume
  • Scout uniforms
  • Soccer socks
  • Uniforms (school, police, military, work, nurse, waitress, fire)
  • Veils

Backpacks “…priced under $100 sold for use by elementary and secondary students are exempt during the sales tax holiday.”

The following is a sampling of the list of eligible school supplies:

  • Calculators
  • Compasses
  • Lunch boxes
  • Protractors
  • Scissors

Pencils, pens, paper (loose leaf, graph, tracing, poster), markers, crayons, index cards, highlighters and much more are still eligible as well.

Items Not Eligible

Special clothing or footwear primarily designed for athletic activity or protective use and not normally worn except for use during an athletic activity.

  • Rental of clothing or footwear
  • Alterations
  • Cleaning services
  • Accessories such as handbags, jewelry, purses, briefcases, luggage, umbrellas, wallets and watches
  • Textbooks
  • Computers and computer software

Special Situations

If school supplies are purchased under a business account, a sales tax exemption certificate will still be required to validate the purchase.

Layaways – If an eligible item is placed on layaway or if final payment is made during the holiday, it qualifies for the exemption.

Rain checks – “Eligible items that customers purchase during the holiday with use of a rain check qualify for the exemption regardless of when the rain check was issued.” A rain check issued during the holiday but the item is purchased after the holiday does not qualify for the sales tax holiday exemption.

Ineligible items and sales tax – If ineligible items are also sold, a vendor “…may not advertise or promise…[to]…pay…[the]…customers’ sales tax.” Vendors may not advertise that they will not collect sales tax on items that do not qualify.

Prepackaged items – If the components of a prepackaged item all qualify for the sales tax exemption during the holiday as individual items, then the prepackaged kit may be sold tax-free during the sales tax holiday.

Buy One, Get One – If an eligible item is advertised as Buy One Get One (free or a percentage off), each item is handled individually. If the first item is $120, it exceeds the limit and is taxable; if the second item is half off ($60), it qualifies for the exemption.

Rebates – rebates generally occur after the sale and do not affect sales price so cannot be applied to bring the sales price of an item down.

Couponscoupons “…can be used to reduce the sales price of an item to $99.99 or less in order to qualify for the exemption….”

Texas State uses the Streamlined Sales Tax organization’s definitions of items exempt for clothing, footwear and school supplies. Eligible items are exempt from both state and local taxes during the holiday.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”