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Tennessee: Trouble with Sales Tax Holidays


 Tennessee Target accidentally charges sales tax on exempt items during sales tax holiday.

 

Tennessee held a sales tax holiday this past weekend; clothing and school supplies costing $100 or less were exempt from sales tax, as were computers costing $1,500 or less. Why, then, was one mom charged sales tax on her purchase of a lunch bag, glue sticks, and post-it notes at Target?

The Tennessee Department of Revenue website provides helpful information on the state sales tax holiday, with FAQs, a fact sheet, an alphabetical list of exempt and taxable items, a retailer’s guide and filing information. Glue sticks and lunch boxes are, in fact, listed as exempt school supplies.

Some shoppers who notice they’ve been incorrectly charged tax launch class action lawsuits against the retailer. But Denise Pishotta, the observant mom, isn’t looking to cause trouble. Nor is she looking for a refund on the tax she paid, which amounts to just over one dollar. Instead, she wants “to raise awareness for parents and retailers to make sure they are not incorrectly charging customers.”

The Tennessee Department of Revenue has been alerted and advises others in similar situations to contact the department. Kelly Nolan Cortesi, spokeswoman for the department, says that customers “will need to return to the retailer where the item or items were purchased to get a refund on the sales tax.” For its part, “the department is happy to talk to the retailer to explain the Sales Tax Holiday and what items are tax-exempt under the law.”

Retailers must adjust point of sale systems during sales tax holidays, since items that are normally subject to sales tax are temporarily tax-free. Given the number of exempt items and exemption price ceilings, is it surprising that errors occur?

How do you prepare for sales tax holidays? Learn how sales tax automation software can help.

photo credit: ktpupp via photopin cc


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.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.